Discussion Paper - As part of Special Issue: Bio-psycho-social foundations of macroeconomics
Toward a cognitive science of markets: economic agents as sense-makers
Samuel G.B. Johnson
11 February, 2019
Behavioral economics characterizes decision-makers using psychologically-informed models. Cognitive science produces psychologically-informed models. Why don’t these disciplines talk more? Here, the author presents several arguments for why cognitive science should inform behavioral economics—it characterizes internal psychological states, builds a richer conception of human nature, pays equal attention to cognition’s successes and failures, embraces multidisciplinary insights, and avoids blind spots produced by behavioral economics’ intellectual lineage. The author illustrates these principles using the cognitive science of sense-making—how humans understand information—including mental tools such as heuristics, stories, and theories. The science of mind can produce new insights to enrich economics.