Frank Knight on Behavioral Economics

Or at least it nudgier side. This is from nearly a century ago, long before the current behavioral economics field began. Knight, like any good economist, agrees with behavorialists in rejecting perfect rationality as a reliable guide to human behavior. But behavioralists go too far when they move from is to should.

From p. 182 of 1921’s Risk, Uncertainty, and Profit:

A large part of the critics’ strictures on the existing system come down to protests against the individual wanting what he wants instead of what is good for him, of which the critic is to be the judge; and the critic does not feel himself called upon to outline any standards other than his own preferences upon a basis of which judgment is to be passed.


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