Ole Rogeberg writes:
Saw your comments on rational addiction – thought you might like to know that some economists think the “theory” is pretty silly as well. It’s worse than you think: They assume people smoke cigarettes, shoot up heroin etc. at increasing rates because they’ve planned out their future consumption paths and found that to be the optimal way to adjust their “addiction stocks” in the way maximizing discounted, lifetime utility. To quote Becker and Murphy’s original article: “[I]n our model, both present and future behavior are part of a consistent, maximizing plan.”
Here’s Ole’s article, “Taking Absurd Theories Seriously: Economics and the Case of Rational Addiction Theories,” which begins:
Rational addiction theories illustrate how absurd choice theories in economics get taken seriously as possibly true explanations and tools for welfare analysis despite being poorly interpreted, empirically unfalsifiable, and based on wildly inaccurate assumptions selectively justified by ad-hoc stories. The lack of transparency introduced by poorly anchored mathematical models, the psychological persuasiveness of stories, and the way the profession neglects relevant issues are suggested as explanations for how what we perhaps should see as displays of technical skill and ingenuity are allowed to blur the lines between science and games.
I agree, and I’d also add that this problem isn’t unique to economics. Political science and statistics also have lots of silly models that seem to have a life of their own.