In the most recent episode of Talking Economics, we talk about behavioral economics with our special guest, Andreas Ortmann, a Professor at the University of New South Wales Business School in Sydney, Australia, and a former professor and researcher at CERGE-EI.
Behavioral economics has gained immense popularity due to its approach to understanding human decision-making and made it a go-to discipline for policymakers, businesses, and researchers seeking to improve decision outcomes.
“Behavioral economics started decades ago. It became popular because of its promise to inject more psychological realism in the economic models. The influence has been tremendous, there are literally thousands of studies that seem to suggest, that people are not as perfect as economic theory often assumes,” explains Professor Ortmann.
However, in recent years, the field has faced challenges due to recent reports of fraudulent behavior in the field.
“Probably millions of dollars were spent on studies and on policy interventions that simply could not deliver what they originally promised they would deliver. Unfortunately, there are many, many other examples that are following similar pattern – sexy results, very promising results, but apparently based on very questionable data, ” says Professor Ortmann.
“It seems to be a problem more in this particular part of science, of behavioral science, where you don’t have a clear-cut theory. It’s a question of different methods in different areas of social sciences. Methods in some areas, like experimental economics, are sounder than methods in other areas,” he adds.
Professor Ortmann is a Professor of Experimental and Behavioral Economics at the University of New South Wales Business School in Sydney, Australia. He was a professor and senior researcher at CERGE-EI from 2000-2009. He is known for his work on the experimental methodology in social sciences, heuristics, and coordination games.