Behavioral economics’ rise traced to Kahneman and Tversky, not earlier German work

Evidence

Research in behavioral economics has boomed since the second half of the 1970s. The boom was initiated largely by the studies of Daniel Kahneman and Amos Tversky on the “heuristics and biases” of human decision-making under conditions of uncertainty. Using mostly classroom surveys with simple decision problems, Kahneman and Tversky argued that people’s decisions systematically deviate from the expectations of economic rationality, and not because of mere carelessness. While behavioral economists generally acknowledge Herbert A. Simon as an early precursor, and some even claim that his concept of bounded rationality is superior to the Kahneman/Tversky approach, there are no references to Günter Schmölders’s earlier work. Even in Germany, the recent surge of behavioral economics traces its roots to Reinhard Selten’s reception of American experimental economics and Simon’s concept of bounded rationality. In many ways, the newly emerging form of behavioral economics differs significantly from Schmölders’s approach. While Schmölders tried to describe normal behavior of people in specific economic circumstances, the school originating with Kahneman and Tversky has a specific interest in producing counter-intuitive insights into the deviations from the model of the homo economicus. The latter school applies a stricter mathematical calculus with the aim of conducting basic research on the principles of human decision-making as such. By contrast, Schmölders’s research was much less theoretically ambitious and much more policy-oriented. — Dieter Plehwe, Quinn Slobodian & Philip Mirowski (eds.), Nine Lives of Neoliberalism, 345

Categorization

• QUESTION: Why was Schmölders’s policy-oriented behavioral economics completely erased from the field’s genealogy even within Germany? Worth chasing as a case of disciplinary canon-formation and national forgetting. The parallel disappearance of a German-language tradition fits the broader story of how American economics conquered the field.
• XREF: Connects to the reader’s broader reading on how American intellectual traditions erase earlier national predecessors (visual parallels in soundscape/Kahneman narrative arc in other chapters), and to the epistemic-shaping strand of the essay on libraries as gatekeepers of what counts as knowledge. — connects to: Kahneman and Tversky’s cognitive psychology reshaped mainstream economics — Lee McIntyre, Post-Truth, 97