Why We Need to Talk About Preferences: Economic Experiments and the Where-Question

Abstract

When economists perform experiments, they do so typically in one of two traditions: cognitive psychology experiments in the heuristics and biases tradition (H&B-experiments) and experimental economics in the tradition of Vernon Smith. What sets these two traditions apart? In this paper, I offer a novel conceptualization of their pervasive disagreements. Focusing on how each camp approaches preferences, one of the most fundamental concepts in economics, I argue that experimental economics can be reconstructed as holding that the constituents of preferences can be partially located in agents’ environments, while H&B-experiments implicitly assume that the constituents of preferences are entirely located within agents’ bodies. The paper (i) outlines how my reconstruction can account for the disagreement between the two paradigms, (ii) defends the plausibility of this reconstruction, and (iii) highlights its implications for the debate about the nature of preferences in economics.

The Specter of Revealed Preference Theory

“…Despite the fact that many economists endorse behaviorism in economics (for the most infamous endorsement, see Gul & Pesendorfer 2008), most philosophers of economics tended to reject it based on the following two arguments (see Beck 2022). 2 The first argument concerns the importance of beliefs for inferring prefer-ences from choices (3.1.).…”