https://astralcodexten.substack.com/p/on-hreha-on-behavioral-economics

Jason Hreha's article on The Death Of Behavioral Economics has been going around lately, after an experiment by behavioral econ guru Dan Ariely was discovered to be fraudulent. The article argues that this is the tip of the iceberg - looking back on the last few years of replication crisis, behavioral economics has been undermined almost to the point of irrelevance.

The article itself mostly just urges behavioral economists to do better, which is always good advice for everyone. But as usual, it's the inflammatory title that's gone viral. I think a strong interpretation of behavioral economics as dead or debunked is unjustified.

I.

My medical school had final exams made of true-false questions, with an option to answer "don't know". They were scored like so: if you got it right, +1 point; wrong, -0.5 points; don't know, 0. You can easily confirm that it's always worth guessing even if you genuinely don't know the answer (+0.25 points on average instead of 0). On average people probably had to guess on ~30% of questions (don't ask; it's an Irish education system thing), so you could increase your test score 7.5% with the right strategy here.

I knew all this, but it was still really hard to guess. I did it, but I had to fight my natural inclinations. And when I talked about this with friends - smart people, the sort of people who got into medical school! - none of them guessed, and no matter how much I argued with them they refused to start. The average medical student would sell their soul for 7.5% higher grades on standardized tests - but this was a step too far.