In economics, we are taught to think of people as utility maximizers. However, marketers tend to be much more "cognitive" in their approach to human behavior. People buy stuff as a result of a very contextual decision process. In the marketing world, decisions to buy stuff are triggered by cost and percieved benefits, what other people are buying and what people remember about a product ... it seems more simple to postulate that people have a set of rules that they apply to some classes of economic behavior. ... - Economists need to expand the repertoire of explanations. Economists should learn how to model rule-based behaviors and interactions with the same ease as they can calculate a Langrangian multiplier. Econ 101 should start with a speech saying how people sometimes apply rules to economic behavior and at other times they act like classical utility maximizers. Students will then learn marginal analysis and models that embody rules based behaviors.
The usual response to "someone ought to do X" is "why not you?". Introductory classes must meet a lot of constraints. They must prepare those who will continue in the tools that are actually used at higher levels. And they must give the rest some tools they can actually use to understand some phenomena around them.
Yes, some people are having some success in explaining some kinds of behavior with rules, but such papers have hardly taken over the journals. And I'm somewhat at a loss to think of what particular rules I would teach GMU undergraduates to take up half of an Econ 101 class. Of course one could just grab material from current marketing 101 classes. But is learning to market really that important?
Robin Hanson [EMAIL PROTECTED] http://hanson.gmu.edu
Assistant Professor of Economics, George Mason University
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