Contrarian (in a good way) economist Ariel Rubinstein pointed me to this book of his from 2012 that I really enjoyed.
It’s a bit related to three topics we’ve discussed in this space:
– Parables vs. stories and more on stories in social science here
– Why do we study social science?
– Four projects in the intellectual history of quantitative social science.
I wasn’t sure where the best place to leave this comment would be, but just wanted to give a heads up – on your “Blogs We Read” page, the URL listed for Frank Harrell’s blog leads to a blank web page.
It looks like an updated URL should be
https://www.fharrell.com/post/
instead of
http://www.fharrell.com/#posts
Never mind – It was just an issue if you open the link in a new tab
On the four projects link, there are a number of links related to risk aversion. One question you ask in one of the posts is about why economists don’t apply risk aversion to goods. But this is the whole point of the consumption-based capital assets pricing model (CCAPM). The beta in this model is versus aggregate consumption, rather than the market portfolio. Now it turns out that CCAPM doesn’t do that good a job in explaining the world, but the idea is still taught. Moreover, many of the textbook macroeconomics models they teach grad students include agents that don’t really care about money per se, they care about the present discounted value consumption they can get over time.
2012 is a long time ago. How does this book fare with regards to citing research that didn’t or likely won’t replicate? Thinking Fast and Slow is from 2011 and it cited plenty of such work.
Rubinstein is actually a noted critic of behavioral economists.
https://www.econlib.org/archives/2005/10/revenge_of_the.html
Thanks for the reference to my book. As all my books, this book is freely downloadable from my homepage
https://arielrubinstein,tau.ac.il
The original Hebrew version of the book is btw from 2009 (the 2012 is just a translation). To those interested see also (for example):
my article Dilemmas of An Economic Theorist. Econometrica, 74 (2006), 865-883
https://arielrubinstein.tau.ac.il/papers/74.pdf
Rubinstein’s “Jungle” example was very enlightening for me when I first saw it. It discusses finding an equilibrium under the assumption that disputes are resolved by fights, as they are in nature for many creatures. The entire vocabulary of economic modeling is easily applicable to this economy. When you realize this, it makes you ask yourself if perhaps many assumptions about how society organizes itself seem self evident but in fact they are assumptions that we feed in to our models, and not inferences that we make based on our reasoning.
Thanks Andrew for pointing me to this book. It’s pretty amazing.
And thanks Ariel for writing a delightful, illuminating book. I’ll never think about economics the same way.