Modeling Behavior: A Critical Agenda
The traditional approach to modeling behavioral anomalies consists of modifying the specification of agents’ characteristics in order to exhibit or generate each such anomaly. Within this context, I raise two issues: (1) why agents’ characteristics differ and how they are determined, and (2) the design of policies and institutions when traits are at least partially influenced by the environment. However, the main argument in the paper is that the traditional, piecemeal approach may be problematic due to interactive effects between traits or behaviors. This suggests that greater effort should be devoted to determining which traits are interrelated and to studying them jointly rather than separately. Finally, I briefly mention two alternative modeling strategies which may be more amenable to analyzing behavior in new situations.
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