Sunday, October 12, 2025

History of Psychology and Behavioural Science Reflections

I had an interesting experience recently. Someone told me they read the blog. I have seen the stat-counter in blogger showing a lot of people viewing the posts but I assumed this was mostly AI bots.  Back in the day just before twitter, it felt like the blog got a bit of attention, in that people would regularly ask me about something that we had posted on it. I think I was possibly also more extraverted and actually spoke to people in those days and also enjoyed the feeling of incredibly localised fame. In any case, if anyone I know is reading this, just let's agree that, if anyone asks, I am mainly working on pumping out papers in top journals like a respectable academic and not the various distractions that arise here. 

It is, as you probably know if you read this, my sixth and final year as head of the Department of Psychological and Behavioural Science at LSE. I am doing a lot of things that have become part of my calendar for the final time such as welcoming students, apologising to various colleagues about how the teaching allocation has worked out, and preparing our budget justification and hiring rounds for the following year. I have found the role difficult at times but meaningful. I was probably suited to be a Department head, it is a relatively strategic role but you are connected to pretty much everything from an academic perspective, including continuing to teach and research in most cases. I am not entirely sure what it makes sense for me to do next. Hence some of the posts that will follow have an exploratory vibe. I am quite lucky that my poor financial skills for most of my twenties and thirties have ruled out early retirement so I am committed to continuing a career of some type. 

For several years I have given a lecture on the history on economics and psychology across many courses here, in Stirling, and in Dublin. I was glad to give a version of this as the IAREP Kahneman lecture in Estonia. One point I made concerned the eclectic roots of a lot of modern behavioural economics and behavioural science of the type that has ended up in policy. I gave the example of hyperbolic discounting which has been a key concept in modern behavioural economics. Karl Popper was a major figure in LSE in the 20th century and I walk by where his office would have been regularly. I don't know if he had a bad interaction with some of our predecessors in psychology but he famously dismissed Freudian thinking as antithetical to the values of an open society. Whatever about a reticence for a lot of modern behavioural scientists to be linked to behaviourism, to be linked with psychoanalysis would be beyond the pale for most. And yet as I discuss in the lecture, Ainslie a behaviourist working on addiction using animal models developed hyperbolic discounting in the middle of this clinical work and from his direct reading of Freud. And there is a line from Freud to modern behavioural economics that is quite clear. Kahneman in a late interview talks about how the famous device of System 1 and System 2 is highly Freudian. Yet of course Freud himself would not have wanted much to do with the type of quantitative techniques that are part of modern normal behavioural science. In the lecture, I get out of dodge fairly quickly by using the distinction of context of verification and context of discovery. We may not use Freud to test modern theory but we could learn from how theory has been developed and retain commitments to be well-read in those that have explored the mind most deeply. Alas the life-size cardboard cut-out of Freud that lived in our Department for well over a decade (no-one seems to know how long) went missing at the end of last year. We think he may have been brought for a few beers by a group of students and was accidentally misplaced. We are working out how to fill the gap. 

Photo: An image of our dear departed Sigmund enjoying himself at a student party. 

I have also been spending a lot of time reading about the history of psychology and behavioural science at LSE. In most of the documents so far, we have been talking about the first psychology department being formed in LSE in 1964. See below the first mention of a psychology Department from Dahrendorf's history of LSE. "Not all innovations came to fruition immediately. Hilde Himmelweit, since 1964 the first Professor of Social Psychology in Britain, had to struggle to secede from the Sociology Department, though her rare combination of charm and tenacity in the end brought success". This was approved by the Director Carr-Saunders at the time. Obviously, there are also quite a lot of relevant things happening in the Department of Social Policy at that point that eventually led to their behavioural group. 

Photo: Department of Social Psychology 1970 (Photo Credit and Context here)

However, what happened between the formation of LSE and the formation of the 1964 Department is also very interesting. One of the founders Graham Wallas was particularly interested in social psychology and he wrote a lot about psychology in policy, industrial policy, creativity, and other topics that remain live or were live until quite recently. I have been looking through some documents from the period, and it is fascinating how many of the topics that animate the current department were being hammered out. Adam Oliver's recent article on Wallas gives a good sense on this. It is fascinating to see the more radical traditions of LSE coming into tension with the utilitarian side on the psychological and behavioural issues at this point (a century ago at this stage). Wallas' book on the psychology of the great society is linked here and a lot of the themes are very recognisable. It is also interesting that a question for LSE since it was formed has always been where to put the behavioural and psychological dimensions of teaching and research. We have been part of the founding ideas, integrated into general social science sequences, part of a sociology department, a dedicated Institute, then a Social Psychology Department, with the behavioural dimensions forming within the Department of Social Policy, and then eventually the current PBS chapter integrating the latter two. The more I read on it, the story is very interesting. LSE is one of the key institutions in the history of policy ideas and has always grappled with how to integrate psychological and behavioural aspects. It will be interesting to see how it goes in the next decade or two particularly as many of the initiatives that LSE launch like the Global School Of Sustainability will have large psychological and behavioural elements. 

A lot of the psychology and behavioural science being progressed here by was shaped by various crises. It has been very interesting to listen to colleagues in later stage of career speak viscerally about how social psychology was shaped by the trauma of World War 2 and the attempt to understand it. A lot of what is coming under the heading of behavioural science in its current development took shape during the Great Financial Crisis. Several colleagues are moving very quickly to understand the impact AI will have in the context of political polarisation and declining youth mental health. In general, I feel surrounded by the themes of the human dimensions of climate, conflict, financial instability, and the quest for meaning and well-being in the face of various types of adversity. 

Saturday, September 27, 2025

Final Student Welcome

My sixth and final time as Department head today welcoming new students to LSE Department of Psychological and Behavioural Science There has been psychology in LSE since at least 1964, and just under 10 years ago, staff in the previous Department of Social Psychology joined with colleagues from Social Policy working on behavioural science, including the flagship Executive MSc in Behavioural Science, to form the new Department of Psychological and Behavioural Science, initially headed by Professor Cathy Campbell and then Professor Paul Dolan. Throughout the decade since it was founded, with dedicated work from dozens of people in a wide range of roles, it has added a new and now thriving undergraduate programme in psychological and behavioural science, and a Masters in Behavioural Science now in its sixth year with alumni placed in hundreds of organisations where behavioural science is researched and applied, to add to existing renowned programmes in Social and Cultural Psychology, Organisational Psychology, Psychology of Economic Life (now Societal and Environmental Psychology), and Social and Public Communication, as well as a PhD programme that currently works with approximately 40 PhD researchers. Faculty and staff numbers have grown significantly during the period to reflect the wider scope and depth of the teaching programmes and research areas. Alongside research staff, graduate teaching assistants, visiting staff, and a wide network of collaborations and supports across and outside the university, it is an exciting and generative environment with major research programmes on well-being, political polarisation, organisational culture, climate change, health, conflict, and several others evolving alongside a thriving seminar and events culture. A growing alumni group engage continuously across many activities including seminars, policy simulations, career talks, and many others. We are also proud that it continues to be an eclectic Department reflecting several traditions across social and organisational psychology and emerging interdisciplinary behavioural science streams. The tensions and dialectic between these streams is often a source of genuine insight and progress, as well as spirited disagreement. Many of the main challenges of the 21st century have deep psychological and behavioural foundations. Understanding political polarisation, the human processes of climate change, engagement with AI, conflict, the future of work and organisations, and many others require a generation of people with the ability to understand and work on how complex psychological and behavioural features of humans engage with rapidly evolving social, technological, and physical environments. We are proud to welcome this year's incoming students to an environment where hundreds of scholars, researchers, professional staff, and students work continuously on these topics within the wider environment of LSE, one of the world's leading social science institutions.

Monday, September 01, 2025

Some recent readings

I am spending a lot of time at the moment trying to build resources for our ethics of behavioural science initiative and preparing for a number of events on climate change as part of my role on the Irish climate change council. As said in previous posts, I am still head of the Department at LSE and spend a lot of time across things like hiring and curriculum design. We recently completed a piece of work reviewing all of our assessments in light of developments in AI, which was interesting. I am mostly through the panic phases of large-scale LLM use. I will post at some stage with some thoughts on it when we have more time to separate out the different elements. My blogging brain might also slowly return and for now at least I can share some interesting readings. 

I have enjoyed reading Cass Sunstein on these topics for a long-time and good to see Manipulation now out. 

Thanks to new LSE PBS colleague Ben Tappin for pointing to a range of papers on the potential persuasiveness of LLMS - one key paper he has been involved with here 

There are widespread fears that conversational AI could soon exert unprecedented influence over human beliefs. Here, in three large-scale experiments (N=76,977), we deployed 19 LLMs-including some post-trained explicitly for persuasion-to evaluate their persuasiveness on 707 political issues. We then checked the factual accuracy of 466,769 resulting LLM claims. Contrary to popular concerns, we show that the persuasive power of current and near-future AI is likely to stem more from post-training and prompting methods-which boosted persuasiveness by as much as 51% and 27% respectively-than from personalization or increasing model scale. We further show that these methods increased persuasion by exploiting LLMs' unique ability to rapidly access and strategically deploy information and that, strikingly, where they increased AI persuasiveness they also systematically decreased factual accuracy.

Faisal Naru's recent paper in Behavioural Public Policy updates and elucidates his widely circulated mapping of behavioural science units around the world. "Behavioral public policy bodies: New developments & lessons". 



A recent paper in Behavioural Public Policy calling for Boosts over Nudges. Firstly, BPP has been an excellent journal (I am on the editorial board but I am not a key figure in driving it - credit mostly to Adam Oliver who has pushed it from inception). It has done a great job in covering all these debates. As students might testify, I am not a convert to the argument for Boosts in terms of scalable public policy (though the key papers are often stimulating and the overall ideas are fascinating to discuss). 

As said on a previous post, a podcast I have been enjoying the last few weeks is Rational Reminder which does deep dives into a lot of behavioural personal finance. There are nearly 400 episodes and the quality is very high, including some great episodes on things like how Vanguard and Dimensional work, and a lot of episodes on investor behaviour.

Saturday, August 30, 2025

August 30th Personal Reflections and Links

I am entering into my sixth and final year as the head of the Department of Psychological and Behavioural Science at LSE. I have and continue to put a lot into this role and there has been a lot of movement in the Department over the time I have been there, including hiring, extensions of programmes, new executive options, new philanthropy lines, etc., I gave a few reflections before and at some point I might attempt a lessons-learned piece but definitely quite a bit down the line. Things that go well tend to habituate quickly in your mind. Things that have gone less well take longer to shake off. I think we have created a Department with a huge potential over the next decades and I will be giving it a good push in the last year. 

I wrote in another post about the type of things I have been working on from a research perspective. I am continuing to work on these topics. The FORGOOD initiative has also moved into a much more active phase, including rolling out our first cohort of industry participation this year. We have built a range of materials for use by cohort members and I have been enjoying engaging with a lot of people on this. 

I have been running a lot and strength training in the time I have been at LSE. I started running half-marathons in 2017 and ran my first marathon in the Connemara hills back in April and am doing my second in Dingle in Kerry this week. For any readers who have shared my early career path of health neglect and over-weighting of academic life, I have to recommend at least trying running or long walks as an antidote. Walking in Scotland when I worked there was my first very structured attempt to create a proper space away from work and that led to running and to a range of other health activities. 

For most of my life, I also had a very bizarre relationship with money and took precisely zero account of all that I learned about investment returns and human behaviour. In the last few years, that has changed as well. I don't know whether I should be annoyed or reassured as a behavioural economics devotee that I have left it all a bit too late to be a fully effective strategy. Anyone in your 20s or 30s with a reasonable research job reading this for god sake set up a low fee investment account of some type and start contributing to it, and spend a bit of time looking at your pension options. It is insane how much you can alter your financial trajectory at this stage.  A couple of years ago I also stopped drinking alcohol and I have yet really to come to a conclusion as to whether this is something I want to do permanently.  But everything combined has definitely given a stronger buffer around academic stress.

In terms of things I have been reading, watching, or listening to, I still feel a bit homeless when it comes to social media. I post the odd time on Linkedin, mostly professional updates with some attempt at authenticity. I have not changed my view that X is fatally compromised in terms of how it is run. And Bluesky just have never managed to break out of its very heavily US centre-left base (though some colleagues really have used it effectively so I don't want to be too negative). I have been playing around with AI a bit and still count myself among the sceptics. One use I have found is that Gemini can increasingly do things in gmail like add things to calendars if you ask it, so that alone is worth at least some of the trillions. I do enjoy playing with GPT-5 and I think the changes in its tone etc., have been very positive. I use it to try to structure my to-do list from time to time. It is still not doing anything in my world that is transforming how I work but maybe if they stop constantly making bullshit claims and start finding low-level useful things it can do, this could be a path to converting people like me.

Cass Sunstein has posted a bit about listening to conservative talk radio. I have partly been influenced by him to listen to a few of them and partly listening to personal finance podcasts brought me into their orbit. I like listening to Dave Ramsey in particular. He is an evangelical (in every sense of the term) advocate of debt-free living. His main advice is to get rid of any high interest debt with a massive degree of intensity ("your friends should think you have joined a cult"), build up an emergency fund, invest a solid portion of your income in diversified stock funds, and pay off your mortgage as early as possible. He has a number of best-selling books on this broad theme. His radio shows mostly involve people ringing in with various debt problems and invariably involves him advising them to sell some debt-carrying assets, cut up their credit cards, try to build their income, and find some way to get to debt-zero, with an emergency fund, and the beginning of a saving and investment trajectory. I find a lot of what he says about the negatives of debt intuitively appealing and listening to his callers often brings to life many of the things I have thought about over the years on financial behaviour. He will often start talking about how financial wisdom can be found in scripture, or his love of guns, or the importance of the nuclear family above any other family structure. There are lots of things he says that should make me just turn off the channel but I grew up around many people who I thought were decent and I was able to trust and be around who often said things that I would never hear in my current environments. Truthfully I am unlikely to convert to Ramsey's type of Christian practice, or start being enthusiastic about gun ownership, or feel that my friends living together who haven't got married are doing something sinful. But, as one example, he has made me think on several occasions, whether getting in debt to gain a higher education is a sensible option for everyone, and in general listening to a conservative perspective on how to get out of poverty is a useful counter-balance to the stuff I would generally listen to, though again you are not likely to find me advocating for US style welfare policies in Europe any time soon.

Similarly, listening to some small t Trump supporting US podcasts has been interesting to at least get some sense of where Americans are going - I do find myself shouting a little bit at the "radio" at the complete refusal of nearly all of them to recognise that Trump's policies are not likely to reduce the US deficit. But you do hear more clearly what is driving a lot of the population, and it makes it feel less alien to hear regular people ringing in and giving their views. I also hope former students reading would recognise that this is not some fanciful new direction on my behalf and I have always spent time trying to be where people are in terms of reading and listening (partly influenced by Arthur Conan Doyle's idea of having Sherlock Holmes be a voracious reader of agony columns, showbiz press etc., which somehow got under my skin reading the books as a kid). Truthfully most of my podcast listening is either football shows (Football Cliches is excellent if you are someone who enjoys the premier league and jokes about language) and various multi-presenter podcasts where middle-aged progressives try to come to terms with how disorderly everything has become. 

A more research driven podcast that I have been enjoying the last few weeks is Rational Reminder which does deep dives into a lot of behavioural personal finance. There are nearly 400 episodes and the quality is very high, including some great episodes on things like how Vanguard and Dimensional work, and a lot of episodes on investor behaviour. 

On less behavioural related matters, I enjoyed Bodkin a lot more than I thought I would from the reviews. A bit like Only Murders in the Building with a darker Irish feel.

Thursday, August 28, 2025

Welcome Address Association of Technical Staff in Psychology

Good labs and software underpin a lot of behavioural research broadly defined. So it was great to welcome the Association of Technical Staff in Psychology (https://atsip.ac.uk/) for their 2025 annual conference at LSE. Thanks to our Scientific Officer and Head of Laboratory Innovation Sean Rooney for invitation. There has been psychology in LSE since at least 1964, including experimental research embedded into an earlier version of our undergraduate. This had largely fallen off by the mid 2000s. Over the last decade, there has been a large increase in our capacities in these areas, including the development of the Behavioural Research Lab (https://lnkd.in/dKqG56ZR), as well as a new undergraduate programme, and Masters and Executive Masters in Behavioural Science that draw heavily from lab and survey design techniques. In that context, it is good to see the conference discuss innovations across a range of capacities including SuperLab, PsychoPy, Gorilla, QuestionPro, StatsCloud, Python pipelines, eye-tracking, immersive VR set-ups, and validation hardware such as the Black Box ToolKit. I spoke in my welcome remarks about the development of behavioural research capacities across government and industry nationally and internationally in recent decades. In the UK context, the recent development of Behavioural Research UK is one example of significant investment in the future of behavioural research across a range of applications. The vast range of policy and business applications of behavioural research creates a range of ethical and regulatory issues that are at times difficult to navigate and also very interesting places to think about scale and social purpose. The UK clearly has a potential to lead on such applications and the extent to which social purpose and behavioural ethics should be factored into investments in commercial applications is a key question particularly amid the increasing policy interest in stimulating AI applications. Lab technicians and software specialists in these spaces are in a good position to input on many issues, including the feasibility of making behavioural research more dynamic, more representative, minimally invasive, as well as maintaining and building trust in data privacy, fidelity, and integrity. #BehaviouralScience #ATSiP2025 #Psychology  #Ethics #AI #LSE

Monday, June 16, 2025

IAREP Kahneman Lecture: Economic Psychology and Behavioural Public Policy

Those masterful images because complete / Grew in pure mind but out of what began? / A mound of refuse or the sweepings of a street, / Old kettles, old bottles, and a broken can, / Old iron, old bones, old rags, that raving slut / Who keeps the till. Now that my ladder's gone / I must lie down where all the ladders start / In the foul rag and bone shop of the heart.

WB Yeats - The Circus Animals' Desertion

I gave one of the keynote lectures at the International Association for Research in Economic Psychology in Estonia in June. The talk outlined ideas on the role of economic psychology in the development of current trends in behavioural science and policy.   It offered a reassertion of the importance of eclectic sources of ideas in economic psychology both historically and for the future.  This post contains links to some of the key papers used in preparing the talk and is provided as an aide to the presentation and hopefully a jumping off point for some attendees to explore more of the area. 

Deep History 

Ashraf, Camerer and Loewenstein's "Adam Smith, Behavioral Economist" provides an account of the ideas of one of the era's main figures.

David Hume also anticipates many of the key ideas in modern behavioural economics. See below for a particularly illustrative passage (the full chapter here) from his Treatise of Human Nature, in which Hume provides an elegant account of present-bias, one of the key concepts in modern behavioural economics. Hume's work, in general, was dense in economic and psychological intuition, with many insights relevant to the types of literature we discuss on this blog.
"In reflecting on any action, which I am to perform a twelve-month hence, I always resolve to prefer the greater good, whether at that time it will be more contiguous or remote; nor does any difference in that particular make a difference in my present intentions and resolutions. My distance from the final determination makes all those minute differences vanish, nor am I affected by any thing, but the general and more discernible qualities of good and evil. But on my nearer approach, those circumstances, which I at first over-looked, begin to appear, and have an influence on my conduct and affections. A new inclination to the present good springs up, and makes it difficult for me to adhere inflexibly to my first purpose and resolution. This natural infirmity I may very much regret, and I may endeavour, by all possible means, to free my self from it. I may have recourse to study and reflection within myself; to the advice of friends; to frequent meditation, and repeated resolution: And having experienced how ineffectual all these are, I may embrace with pleasure any other expedient, by which I may impose a restraint upon myself, and guard against this weakness.".

Quite a lot of work here to be cited on Utilitarianism and the various debates about how to integrate human subjectivity during that period. JS Mill Principle of Political Economy;  An Introduction to the Principles of Morals and Legislation by Jeremy Bentham; Utilitarianism by JS Mill


General histories of economic psychology 

First chapter of Economic Psychology: an introduction by Erich Kirchler and Erik Hoelzl. In general, the book also provides a template for the textbook scope of modern economic psychology. 

Introduction to Economic Psychology: The Science of Economic Mental Life and Behaviour by Rob Ranyard, Vera Rita De Mello Ferreira. 

The work of George Katona at the Survey Research Centre at Michigan and the work of Herbert Simon at Carnegie-Mellon is described in this 2003 Journal of Socio-economics article by Hamid Hosseini. The article also provides information and links to a range of other interesting papers and contributions from the first half of the 20th century.

Histories of Behavioural Economics 

Camerer, C. F., and Loewenstein, G. (2003) “Behavioral economics: Past, present, future,” in Camerer, C. F., Loewenstein, G., and Rabin, M. (eds.) Advances in Behavioral Economics. Roundtable Series in Behavioral Economics. Princeton, NJ: Princeton University Press: 3–51

Behavioral Economics: Policy Impact and Future Directions. Chapter on Development of Behavioural Economics

Laibson, D., and Zeckhauser, R. (1998) “Amos Tversky and the ascent of behavioral economics.” Journal of Risk and Uncertainty 16 (1): 7–47.

Rabin (2002), "A perspective on psychology and economics," European Economic Review.

Richard Thaler's MisBehaving is a gripping account of the development of behavioural economics in top US universities in the 70s, 80s, and 90s.

Niels Geiger The Rise of Behavioral Economics: A Quantitative Assessment

Abstract

This article is devoted to the issue of operationalizing and empirically measuring the development of behavioral economics, focusing on trends in the academic literature. The main research goal is to provide a quantitative, bibliometric assessment to answer the question of whether the relative importance of behavioral economics has increased over the past decades. After an introduction and a short summary of the history of behavioral economics, several studies are laid out and evaluated. The results generally provide a quantitative confirmation of the story of a rise of behavioral economics that can be found in the literature, and add some notable additional insights.

Hands, D. W. (2010) “Economics, psychology and the history of consumer choice theory.” Cambridge Journal of Economics 34: 633–48.

This paper examines elements of the complex place/role/influence of psychology in the history of consumer choice theory. The paper reviews, and then challenges, the standard narrative that psychology was 'in' consumer choice theory early in the neoclassical revolution, then strictly 'out' during the ordinal and revealed preference revolutions, now (possibly) back in with recent developments in experimental, behavioural and neuroeconomics. The paper uses the work of three particular economic theorists to challenge this standard narrative and then provides an alternative interpretation of the history of the relationship between psychology and consumer choice theory.

Esther-Mirjam Sent "Behavioral Economics: How Psychology Made Its (Limited) Way Back Into Economics"

Contemporary Overviews of Economic Psychology 

George Katona 1954 Scientific American Article on Economic Psychology

Webley, Burgoyne, Lea, and Young 2001 - The Economic Psychology of Everyday Life 

Handbook of Economic Psychology (1988) W. Fred Raaij, Gery M. Veldhoven, Karl-Erik Wärneryd.

Earl, P. E. (1990) 'Economics and Psychology: A Survey', Economic Journal, 100: 718-55.

Illustrative Canonical Works 

Edgeworth's Mathematical Psychics is a classic work and is eerily relevant to modern debates about decision-making despite being published in 1881. David Colander's excellent JEP article on Edgeworth and Fisher is well worth reading.

Keynes' General Theory set out many of the themes that would be pursued by scholars such as George Katona in developing the field of psychological economics. 

Frank H, Knight's classic "Risk, Uncertainty and Profit" provides ideas on the role of uncertainty in economics that continue to be highly relevant.

Karl Polanyi's "The Great Transformation" is a key work across several interdisciplinary disciplines in Economics. It contains a vast range of insights into the development of market societies and the psychological, cultural, and other aspects of market behaviour.

The work of Maurice Allais was written exclusively in French and not widely translated making it all the more remarkable he was awarded the Nobel Prize in 1988. A study of Allais would require a lot of time, patience and linguistic ability but he is clearly an important figure in the history of economic thought relevant to behavioural economics. Paul Samuelson famously stated that “Had Allais's earliest writings been in English, a generation of economic theory would have taken a different course.”

As much a warning about excess as anything else, Watson (1913) "Psychology as the Behaviorist Views it" is the classic statement of the behaviourist view of psychology.

Simmel's Philosophy of Money is often cited as a historical reference in modern papers on economic psychology. It deals with a staggering array of questions on the philosophy and implications of using money as the medium of exchange.

How the Divorce Happened 

Lewin "Economics and Psychology: Lessons for Our Own Day From the Early Twentieth Century" documents the interaction between the development of neo-classical marginalist economics and the development of psychology as a separate discipline.

Daniel Read's "Experienced Utility from Jeremy Bentham to Daniel Kahneman" provides a detailed account of the attempt to measure utility directly over the centuries. Ulrich Witt also reviews the history of utility distinguishing between sensory utilitarianism that seeks to measure utility directly and the more axiomatic form that dominated in the 20th century.

Bruni, L., and Sugden, R. (2007) “The road not taken: How psychology was removed from economics, and how it might be brought back.” The Economic Journal 117 (516): 146–73

This article explores parallels between the debate prompted by Pareto's reformulation of choice theory at the beginning of the twentieth century and current controversies about the status of behavioural economics. Before Pareto's reformulation, neoclassical economics was based on theoretical and experimental psychology, as behavioural economics now is. Current ‘discovered preference’ defences of rational-choice theory echo arguments made by Pareto. Both treat economics as a separate science of rational choice, independent of psychology. Both confront two fundamental problems: to find a defensible definition of the domain of economics, and to justify the assumption that preferences are consistent and stable.

Jevons: The Theory of Political Economy. Containing the immortal paragraph below. 

"The reader will find, again, that there is never, in any single instance, an attempt made to compare the amount of feeling in one mind with that in another. I see no means by which such comparison can be accomplished. The susceptibility of one mind may, for what we know, be a thousand times greater than that of another. But, provided that the susceptibility was different in a like ratio in all directions, we should never be able to discover the difference. Every mind is thus inscrutable to every other mind, and no common denominator of feeling seems to be possible".

Mid to Late 20th Century Reunification Programmes 

There are obviously dozens of papers that can be included here and many of the main ones are discussed in the references above. Any account of economic psychology and behavioural economics in the 20th century needs to recognise that the separation of the two disciplines was never universally accepted. Several streams of thought including American institutionalism, several streams of UK and European organisational and management psychology, all pre-dated the dominant wave of US behavioural economics that led to at least two Nobel prizes. A lot has been written on these interactions and one purpose of my lecture will be to rethink a little bit how current streams of behavioural public policy are related to the type of economic psychology being promoted through the IAREP conference and similar psychological outlets. 

The Case of Time Preferences and Delayed Gratification 

George Ainslie "Specious reward: a behavioral theory of impulsiveness and impulse control"

George Ainslie "Freud and Picoeconomics"

Walter Mischel: "Processes in Delay of Gratification". 

David Laibson: "Golden Eggs and Hyperbolic Discounting"

Till Grune-Yanoff  "Models of Temporal Discounting 1937–2000: An Interdisciplinary Exchange between Economics and Psychology"

Strange Intersections 

George Ainslie "Freud and Picoeconomics

Hofmann and Van Dillen "Desire: the new hotspot in self-control research". 

Derek Parfit: Reasons and Persons

Behavioural Public Policy: 

Faisal Naru: Behavioral public policy bodies: New developments & lessons (Source of the cool map in the slides). 

Behavioural Public Policy Journal: Edited by Adam Oliver, Cass Sunstein, and George Akerlof a key emerging journal for the development of this field.