This is fun because, as an outsider to both fields, I can just stand back and watch. Dan Goldstein writes:
Someone agreed to give a talk to the University Economics Society here next week with the title: “Why Psychologists know more about Economic Behaviour than Economists”. Any suggestions JDMers might have would be interesting.
The query led to “a flurry of responses,” including:
You could exploit an inadvertent ambiguity in your talk title, and claim that you meant that psychologists know more about economic behaviour than they do about economists. Indeed, economists are mysterious beings. Many persevere in the belief that people must behave optimally, at least on average, and they seem perpetually baffled by basic psychological phenomena that seem completely intuitive to one’s proverbial grandparent. I feel that psychologists indeed understand them quite poorly.
Perhaps the core argument is that we [Psychologists] go out and look at the animals (at least now and then) while the economists very rarely do.
The answer seems to be quite simple. Economists are bound to the ‘rational model’ whereas psychologists are not.
What economists think about psychologists:
1. Psychologists only study rats, pigeons, college freshman, and crazy people.
2. (Perhaps due to the above,) psychologists are not very rational.
What psychologists think about economists:
1. Economists stubbornly hold to a rational model of man(kind) that (they must know) is obviously wrong.
2. Economists can never agree about what will happen to our economy.
I’ll now give a few comments of my own. First, my impression is that, within academia, economics has a higher status than psychology. Thus you see psychologists sniping at economists but not much of the reverse: economists probably don’t spend much time thinking about psychologists. It reminds me of when I used to teach at Berkeley: we could always get a rise out of the students by mentioning Stanford. But, at Stanford, if you mention Berkeley, nobody cares.
On the substance of the matter, of course psychologists will be able to explain some aspects of economic behavior better than economists can, and economists will be able to explain other aspects of economic behavior. I’d trust the economist more on the price of food and I’d trust the psychologist more on the question of what food a person will actually buy. I don’t know that either side would know “more” than the other.