After watching the interview with Professor David Laibson, I was very interested in the discussion about behavioral economics and its connections to uncertainty and prediction, focusing on human behaviors in the world of economics. In this prediction class, we have discussed a lot of the origins of predictions starting the course with the topic of divination and how humans first used forms of prediction to try to better understand uncertainty. At the beginning of this interview, Professor Laibson explains the origins of behavioral economics. He explains that the study of behavioral economics was a field that emerged in the 1980s to withdraw the assumptions that economics makes of humans behaviors and look at it through a lens of evaluative psychology and human understanding. I am curious about these origins and would like to ask Professor Laibson about why this field only emerged in the 1980s? Was there a catalyst that sparked the need for closer observation of how human behavior is connected to economic studies?
From watching this interview, it is clear that this field allows for better prediction and understanding of economics when we can evaluate the certainty and uncertainty of human behavior. Still, it also makes me curious about why behavioral economics wasn’t really studied sooner. It is hard to speculate how events would have happened differently in the past, but I wonder if there had been more calculated/accurate predictions of the economy with the ideas of human behavior in mind if there would have been better outcomes/avoidable outcomes of things like market crashes if we could use human behaviors as a predictive tool earlier in history. I wonder if Professor Laibson would have any thoughts or comments on that idea as well and might have asked about this in an interview with him.