My impression is that the root theoretical problem consists in the ambiguity of:
"do prices adjust to human behaviour, or does human behaviour adjust to prices?" In neoclassical economics, generally the idea is that prices change as an effect of ever-changing human preferences. It is just that this idea is difficult to sustain when people must adjust their behaviour to price levels. Sometimes, people are "price-makers", and sometimes they are "price takers". It may depend a lot on what power they have in the marketplace and what they actually do there. With the aid of these very elementary ideas, you can "fudge" a lot of economic science, if it turns out that the neoclassical theorems simply do not explain anything. Generally, behavioural economics is a result of the failure of "self-interested rational actor models" to explain real behaviour. In principle, behavioural economics recognizes that people respond to more than prices in their economic behaviour, and that their economic behaviour can involve more than (or less than!) a rational appraisal of prices. Jurriaan _______________________________________________ pen-l mailing list [email protected] https://lists.csuchico.edu/mailman/listinfo/pen-l
