06-21-2011, 11:59 PM
(06-21-2011, 11:04 PM)--Pete Wrote: Economists need to spend less time reading Smith and Marx and looking at history and more reading Johnny von Neumann and Oskar Morgenstern and looking at game theory. Especially the results from studying and modeling the prisoners' dilemma which are coming very close to explaining what we call "ethical" behavior, including ethical economic behavior. Not to mention explaining why we are so much ruder on the highway (automotive or informational) than in person.
My sense is that economists spend almost zero time with Smith these days, and less with Marx, but quite a lot with game theory.
What they don't do so much, is go back and reapply the basic insights gained from game theory to the big picture ideas of the old economists, and instead spend their days designing ever more esoteric mathematical contraptions with it. There seem to be sharply diminishing returns to the insights gained from such formalizations, but since the win for the economist is in publications rather than understanding per se, I'm not holding out much hope.
-Jester