Harford Ariely smackdown continues…

I read too many American blogs. They use words such as “smackdown”. Anyway, the debate between me and Dan “Predictably Irrational” Ariely continues – the collected posts are being gathered here.

In my reply to Dan’s first post, I finish by challenging him:

The weaknesses of laboratory experiments are not always quite so evident, especially when they are described as compellingly as in Predictably Irrational. So, let me point them out. While laboratory experiments are great for creating controlled conditions, they also create artificial conditions. There are several examples of important clashes between what happens in the laboratory and what happens outside. We know, for example, that procurement managers systematically screw up when bidding in a laboratory auction, but they do much better job in the (apparently identical) real life auctions situations they face everyday.
The economist John List has tried to replicate some famous “predictably irrational” results from the laboratory; the results tend to evaporate in more realistic settings. In one example I describe in The Logic of Life, List shows that the “irrational” result (which is that people given an unexpected raise work much harder than they could get away with) only lasts for ninety minutes. A gratitude effect that lasts ninety minutes is not the basis on which to rewrite your company’s human resources policy.
I’m not aware that any of Dan’s experiments have been challenged in this way, and I was pleased to see that he often tried to carry out his work in realistic settings such as restaurants and bars. So this isn’t an attack on his work–it’s more of a question. Dan, how can we be confident that these experimental results hold up in real life? And what further work would you like to see, to make us more confident in them?

Dan’s reply will be excellent, I am sure, and is due on Monday.

Tim Harford’s blog

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Tim, also known as the Undercover Economist, writes about the economics of everyday life.