THE SABE NEWSLETTER
THE SOCIETY FOR THE
ADVANCEMENT OF BEHAVIORAL ECONOMICS
Statement
of Purpose
SABE is an association of scholars who
are committed to rigorous economic analysis and are interested in learning how
other disciplines for example, psychology, sociology, anthropology, history,
political science, and biology - further our understanding of economic
behavior. An important function of SABE is to serve as a forum for research
which may not find either comprehension or acceptance in conventional economics
societies. SABE also aims at facilitating communication between economists and
scholars trained in related disciplines.
Vol. 10,
No. 2
Autumn 2002
Editor: Simon James
School of Business and
Economics, University of Exeter, Streatham Court, Exeter EX4 4PU
United Kingdom
Contributions for the next
issue are very welcome email: S.R.James@ex.ac.uk
Daniel Kahneman, Nobel Laureate 2002: A Brief Comment 2
Get Your Abstract in Now for SABE 2002 3
The
2004 Conference
3
Next
IAREP Conference
3
Conference
in Turku, Finland, Summer 2002
4
SABE
Business Meeting, July 1, 2002 in Turku, Finland 4
Implementing
Bylaws and Elections
5
ICAPE
5
SABE
at the Eastern Economic Conference in NYC
5
SABE's
ASSA Session
6
Books of Interest
7
SABE
Executive Board
8
Please visit SABE at
our WEB site: http://www.usask.ca/economics/SABE/
Note that the address
is case sensitive.
Daniel Kahneman, Nobel Laureate 2002: A Brief Comment
By email, I asked Daniel Kahneman, which of his 131 papers was his
all-time favorite? On The Psychology of
Prediction (1973, with Amos Tversky), he responded. It is mine, too.
(Psychological Review, 80, 1973, pp. 237-251).
This paper began when Kahneman and Tversky were at the Hebrew University
in 1968. In tutoring Israeli Air Force flight instructors, they discovered the
following: In conflict with
psychologists' stock-in-trade (reward is far more effective than punishment in
changing behavior), the instructors believed the opposite. The reason: Nearly every time they rewarded their student
pilots, their performance declined. And nearly every time they punished their
student pilots, their performance subsequently improved.
How should a
psychologist respond?
Regression to
the mean, explained Kahneman and
Tversky. In flight maneuvers, progress
between successive maneuvers is slow. It
is likely that pilots who did well in one trial deteriorate in the next.
Instructors wrongly attributed this 'regression' to the detrimental impact of
their positive reinforcement -- an example of attribution error, attributing to human action what is in fact
random.
This erroneous and destructive
feedback loop is ubiquitous. Armies of school psychologists labor intensively
to repair the damage it causes. As
Kahneman and Tversky conclude: "We normally reinforce others when their
behavior is good and punish them when their behavior is bad. By regression
alone, therefore, they are most likely to improve after being punished and most
likely to deteriorate after being rewarded.
Consequently, we are exposed to a lifetime schedule in which we are most
often rewarded for punishing others, and punished for rewarding". (p. 251).
This powerful
insight, were it understood and applied in our schools, universities,
businesses, families, shops, and public policies, could alone alter human
society for the better.
And there are 130 more where that came from.
Shlomo Maital
GET
YOUR ABSTRACT IN NOW FOR SABE 2003
SABE 2003 will be held at the Cal Neva
Resort on the north shore of Lake Tahoe, NV, USA July 28-31. While the deadline for abstract submissions
is not until April 31, 2003, the early submission deadline is December 31,
2002. Early submission gives you a
higher probability of being placed on the program, which has limited
space.
SABE 2003 is generating interest from a
diverse and high quality set of researchers interested in behavioral
issues. Robert Frank from Cornell and
Richard Day from the University of Southern California will give plenary
talks. To date, abstracts for proposed
papers have been received from researchers in fields ranging from psychology to
experimental economics and from researchers at top quality schools including
Cal Tech, MIT, Stanford, and Michigan.
Two specific examples of researchers showing an interest in the
conference include Dan Ariely at MIT and Tim Cason at Purdue. Dan has been one of the most prolific
researchers in behavioral economics over the last few years, effectively
finding innovative ways to blend work in psychology and work in economics. Tim is a well known and innovative
experimentalist, recently applying experimental methods to look at the role of
fairness in decision-making. The point
here is that the conference will provide attendees with many interesting
sessions to attend, many interesting people to meet, and many opportunities for
exposing new research.
See the Call for Papers for the SABE 2003
on the SABE Web site at http://www.usask.ca/economics/SABE/.
Mark Pingle
Chair, Department of Economics
Professor of Economics
University of Nevada, Reno
Reno, Nevada 89434
775-784-6634
Fax 774-784-4728
The
2004 Conference
The conference is being organized by Bijou Yang Lester, Drexel University and will take place at Sheraton University City in West Philadelphia - July 15-18, 2004.
The next IAREP Conference will be
held in Christchurch, New Zealand between Monday 1st and Thursday 4th September
2003. SABE members are encouraged to attend. Further details can be found at
the website: http://events.lincoln.ac.nz/iarep/default.htm
Conference
in Turku, Finland, Summer 2002
The joint IAREP (International
Association for Research in Economic Psychology)/SABE Conference took place at
the Sokos Hotel Hamburger Bors in the center square of Turku, Finland from June
30 to July 4, 2002. Turku, the oldest
city in Finland, has a population of 170,000.
The hotel is not far from the Turku School of Economics and Business
Administration at which conference organizer, Satu Lahteenmaki, is a management
professor.
The conference was a five day
affair, four days of intellectual activity and a one day boat trip aboard one
of those large impressive cruise ships to the Finnish Archipelago (southwest
towards Stockholm). On each evening, a
special event was organized. On the first
night, we went to a reception at the Turku School of Economics and Business
Administration, on night two to a reception at the Turku City Hall, then a boat
trip to Naantali where a nice meal awaited, and finally to a great conference
dinner and entertainment (16th century style) at the ancient Turku
Castle. Keynote speakers were Dr. Kurt Rothschild, an economics professor
emeritus at Linz University in Austria and Dian-Marie Hosking, a professor at
Tilburg University in the Netherlands.
Over 100 people from 29 countries participated in the conference.
Although like many countries,
Finland was suffering a bit from the recession affecting many countries, it
became clear that Finlands growth in the 1990s had been very rapid and had led
it to have one of the highest standards of living in the world. Those of us who visited Helsinki were very
favorably impressed; sightseeing and dining there were a treat.
SABE
Business Meeting, July 1, 2002 in Turku, Finland
The most important meeting agenda item
concerned the transition to operating under the new bylaws, particularly
holding elections. To implement
staggered terms of SABE Board members, it was decided that a random method
(drawing names from a hat) would be used to determine which half of the Board
would have two year terms and which would have four year terms starting with
the end of the meeting. Based on the
drawing the following have two year terms: Simon James, Morris Altman, Art
Goldsmith, Shoshana Gross-bard Shechtman, Richard Hattwick, Louis Levy-Garboua,
Shlomo, Maital, and Kishor Thanawala. The
following have four year terms: John Tomer, Gary Lynne, Bijou Yang, Gerrit
Antonides, Ewa Gucwa-Lesny, Flora Gill, Harinder Singh, and Hugh Schwartz. All are eligible to seek reelection in the
first election. The regular Board term
is four years. At the end of two years
(in 2004), the second election will be held to determine who will hold the
Board positions now held by those on the two year list, assuming they sought
reelection and won the first election.
In another two years (2006), the remainder of Board members may seek
reelection if they choose to do so. It
was decided that the first election should be held in the Fall of 2003 if
possible. This first election should involve
22 candidates seeking 16 Board seats.
Subsequent elections, after the staggering has taken effect, should have 11 candidates for 8 Board
positions. In the first election, it is
also necessary to elect a President and President-elect. Voting would take place by e-mail.
Progress on moving toward elections has been slower than hoped for. First, a message was sent to all SABE members soliciting nominations for new Board members and the positions of President and President-elect. Relatively few nominations were received. Current Board members were asked whether they wanted to seek reelection. Four current members indicated that they did not wish to continue: Shlomo Maital, Dick Hattwick, Art Goldsmith, and Harinder Singh. Possibly due to incorrect or outdated e-mail addresses, it has been difficult making contact with several Board members. Six people have been nominated for the SABE Board. If all the people not yet contacted want to continue on the Board, we would only have 18 people seeking 16 positions, four short of the 22 decided upon at the business meeting. Also, we have only one nominee for President and no nominees for President-elect. It looks like the SABE Board will have to make a decision on how to proceed in this situation.
ICAPE
Morris Altman has made a case for upgrading
SABEs membership. ICAPE is a major umbrella organization whose heterodox
member organizations incorporate perhaps 30-40 percent of all members of the
AER. It embraces economists from a
variety of perspectives (hence the name International Association for the
Advancement of Pluralistic Economics). It
is fighting for fair representation during the ASSA meeting for all
member organizations and provides information for individuals doing work which
is open to different methodological perspectives. Because of its efforts the ASSA has been
unable to cut back non-AEA sessions to the extent desired by many in the AEA
executive. With regard to ICAPE
membership, the next step up in ICAPE gives an organization 1 director with a
$100 fee. As Morris suggests $100
payment seems to be a small price to pay to support ICAPE and to have a strong
say in its policy which will ultimately affect SABE.
Laura Blanciforti of the National
Institute for Occupational Safety and Health has taken the initiative to
organize a SABE sponsored session at the Eastern Economic Association
Conference in New York City on February 22, 2003 with some help from John
Tomer. The session is entitled Perspectives
in Behavioral Economics. Four papers
will be presented; the authors are Mie Augier of Stanford University, John
Tomer of Manhattan College, Jim Granato of the National Science Foundation, and
Laura Blanciforti. Harold Hochman of
Lafayette College has agreed to serve as a discussant. Further details can be obtained from the
Eastern Economic Association website.
SABE's
ASSA Session
As we have done for the past ten ASSA
meetings, SABE will hold a Poster Session in conjunction with the Industrial
Relations Research Association (IRRA) during the forthcoming ASSA meeting in
Washington, D.C. The SABE poster session takes place on Saturday,
January 4, 2:30-4:30 PM, 2003 Hyatt
Regency Capitol Hill, Yorktown RM.
This session is organized by Morris
Altman and includes the following papers:
Freedom to Choose and Choice and
Production X-inefficiencies: The Role of Information, Power and Gender in
Preference Formation and Economic Wellbeing
Morris Altman
Alfred Marshall as Metaphysician and
Economist
Roger Frantz, San Diego State University
Are Firms And Labor Markets More Or Less
Flexible? Divergence Of Hours And Employment Dynamic Adjustment Behavior
Stuart Glosser, University of Wisconsin
at Whitewater and
Lonnie Golden, Penn State University
Abington College
The Rise of Rational Expectations
Hypothesis At Carnegie:Was John Muth Influenced by the 1954 papers by Simon and
Modigliani/ Grunberg
Hamid Hosseini, Kings College
Transactional Theory and the Relevance of
Inconsistent Information to the Making of Final Choices
Shabnam Mousavi, Virginia Polytechnic
Institute and State University
Depression and Occupational Back Injury:
Implications for Employers
Pamela B. Peele, Health Policy &
Management, University of Pittsburgh
Gene Ginchereau, Medical Director, HAPPI
Occupational Health Clinic, Pittsburgh, PA
Sociotechnical and Socioeconomic
Interpretations of the ILWU-PMA Conflict of 2002
Doug Rebne, University of Koblenz,
Germany
Human Well-Being: A New Approach Based on
Overall and Ordinary Functionings
John Tomer, Manhattan College
BOOKS
OF INTEREST
Morris
Altman, Human Agency and Material
Welfare: Revisions in Microeconomics and their Implications for Public Policy,
Boston, Dordtrecht, London: Kluwer Academic Publishers, 1996.
Morris
Altman, Worker Satisfaction and Economic Performance:
Microfoundations of Success and Failure. Armonk, NY: M.E. Sharpe.
Gerrit
Antonides, Psychology in Economics and
Business, Dordrecht: Kluwer, 1991.
J.L.
Baxter, Behavioral Foundations of
Economics, Marmillan Press/St Martins Press, 1993.
Kenneth
Button, ed., The Collected Essays of
Harvey Liebenstein, 2 Vols. New York University Press, 1989.
Young
Back Choi, Paradigms and Conventions:
Uncertainty, Decision Making and Entrepreneurship, Ann Arbor: University of
Michigan Press, 1993.
Richard
Cyert and James G. March, A Behavioral
Theory of the Firm, 2nd ed. Cambridge, Mass: Blackwell Business,
1992.
Peter
E. Earl, Behavioral Economics, Edward
Elgar Publishing, 1998.
Roger
S. Frantz, X-Efficiency: Theory, Evidence
and Applications, Boston: Kluwer, 1988.
Roger
S. Frantz, Hardinger Singh and James Gerber, eds, Behavioral Decision Making: Handbook of Behavioral Economics,
Greenwich: JAI Press, 1991.
Bruno
S. Frey, Economics as a Science of Human
Behavior: Towards a New Social Science Paradigm, Boston, Dordrecht and
London: Kluwer, 1992.
Daniel
Friedman and Shyam Saunders, Experimental
Economics: A Primer for Economists, New York: Cambridge University Press,
1994.
Benjamin
Gilad and Stanley Kaish, eds., Handbook
of Behavioral Economics, 2 vols. Greenwich: JAI Press, 1986.
Shoshana
Grossbard-Shechtman, On the Economics of
Marriage: A Theory of Marriage, Labor, and Divorce. Boulder, Calorado: Westview Press, 1992.
Charles
Hampden-Turner and Alphons Trumpenaars, Seven
Ways of Wealth Creation. New York: Doubleday, 1993.
Daniel
Kahneman, Paul Slovic and Amos Tversy, eds, Judgement
Under Uncertainty:Heuristics and Biases, Cambridge; Cambridge University
Press, 1982.
Simon
James, ed., Taxation: Critical Perspectives on the World Economy. Four volumes,
London and New York, Routledge, 2002.
Simon
James and Christopher Nobes, The
Economics of Taxation, Principles, Policy and Practice, 7th ed.,
revised, Prentice Hall, 2002.
Bill
Jordon, Simon James, Helen Kay and Marcus Redley, Trapped in Poverty: Labour Market Decisions in Low Income Households.
London: Routledge, 1992.
Bill
Jordan, Marcus Redley and Simon James, Putting
the Family First: Selves, Decisions
and Citizenship, University College London Press, 1994.
Robert
Kuttner, The Economic Illusion: False
Choices Between Prosperity and Social Justice. Philadelphia: University of
Pennsylvania Press, 1987.
Stephen
E.G. Lea, Paul Webley and Brian M. Young, eds., New Directions in Economic Psychology: Theory, Experiment and Application. United Kingdom: Edward Elgar Publishing,
1992.
Harvey
Leibenstein, Inside the Firm: The
Inefficiencies of Hierarchy.
Cambridge, Mass: Harvard University Press, 1987.
Tony
Lawson, Economics and Reality, London
and New York, Routledge, 1997.
Alan
Lewis, Paul Webley and Adrian Furnham, The
New Economic Mind: The Social Psychology of Economic Behaviour. New York and London: Prentice Hall, 1995.
George
Lowenstein and Jon Elster, eds, Choice
over Time, New York: Russell Sage Foundation, 1992.
Shlomo
Maital and Sharon Maital, eds., Economics
and Psychology. United Kingdom:
Edward Elgar Publishing, 1993.
Shlomo
Maital, Executive Economics: Ten
Essential Tools for Managers. New York: The Free Press, 1994.
Roger
McCain, A Framework for Cognitive
Economics, New York: Praeger, 1992.
Marvin
E. Rozen, The Economics of Organizational Choice: Workers, Jobs, Labor Markets,
and Implicit Contracting. Ann Arbor:
University of Michigan Press, 1991.
Hersh
Shefrin, Beyond Greed and Fear;
Understanding Behavioral Finance and the Psychology of Investing, Boston:
Harvard Business School Press, 2000.
Robert
J. Shiller, Irrational Exuberance. With
a New Preface by the Author, Princeton University Press, 2001.
Andrei
Schleifer, Inefficient Markets: An
Introduction to Behavioral Finance, Oxford University Press, 2000.
Hugh
Schwartz, Rationality Gone Awry? Decision
Making Inconsistent with Economic and Financial Theory, Praeger, 2000.
Herbert
A. Simon, Administrative Behavior: A Study of Decision-Making Processes in
Administrative Organizations, The Free Press, 1997.
Richard
H. Thaler, The Winner's Curse: Paradoxes
and Anomolies of Economic Life. New York: The Free Press, 1992.
Richard
H. Thaler, ed., Advances in Behavioral
Finance, New York: Russell Sage Foundation, 1993.
John
F. Tomer, Organizational Capital: The
Path to Higher Productivity and Well-Being. New York, Praeger, 1987.
John
F. Tomer The Human Firm: A Socio-Economic
Analysis of Its Behavior and Potential in a New Economic Age, New York:
Routledge, 1999.
Karl-Erik
Warneryd, The Psychology of Saving: A
Study on Economic Psychology, Edward Elgar, 1999.
Karl
Erik Warneryd, Stock Market Psychology:
How People Value and Trade Stocks, Edward Elgar, 2001.
Klaus
Weiermair and Mark Perlman, eds., Studies
in Economic Rationality: X-Efficiency Examined and Extolled. Ann Arbor: University of Michigan Press,
1990.
The SABE Executive Board
John Tomer (Manhattan College)
President and Co-Editor Journal of Socio-Economics
Gary Lynne (University of Nebraska)
.............................................................................. Secretary
Bijou Yang (Drexel University)
.............................................................................. Treasurer
Simon James (University
of Exeter, UK)
.Editor,
SABE Newsletter
Morris Altman
(University of Saskatchewan)
............................... Editor,
Journal of Socio-Economics
Shlomo Maital
(Technion-Israel Institute of Technology)
Member-at-large.
Gerritt Antonides
(Erasmus University)
................................................................. .Member-at-large
Art
Goldsmith (Washington & Lee University)
.Member-at-large
Shoshana
Grossbard-Shechtman (San Diego State University).
..
Member-at-large
Ewa
Gucwa-Lesny (University of Warsaw)
.
.Member-at-large
Richard
E. Hattwick (Western Illinois University).Member-at-large and Founding
Editor
Journal of Socio-Economics
Flora
Gill (University of Sydney, Australia)
.................................................................. Member-at-large
Louis Levy-Garboua
(University de Paris I)
.Member-at-large
Harinder Singh (Grand
Valley University)
....................................................
..Member-at-large
Hugh
Schwartz
.Member-at large
Kishor Thanawala
(Villanova University)
.Member-at-large