Comments on: Must-read Sentences

By: Lord

Lord — Tue, 04 Nov 2014 04:03:05 +0000

I agree one would want a theory on when one is playing with house money, how it becomes internalized into an endowment where loss aversion predominates, assuming of course such an intelligible model exists and can be demonstrated and is not just a collection of inconsistencies.

By: A

Mon, 03 Nov 2014 00:03:24 +0000

Is this an expression of the desire for more detail? Or is Collins asking for something fundamentally different? Any observed behavior can be described as a description, with an accompanying demand for the ‘Why?’ It’s the scientific version of the +1 game.

Collins may be “right” that he wants more explanation for his purposes, but what answer will satisfy him that is not simply a description of phenomena that is itself reducible into further descriptions?

By: Jack PQ

Jack PQ — Sun, 02 Nov 2014 22:11:37 +0000

This seems analogous to the whole “anomalies” literature in asset pricing (the biggest subfield of financial economics, one concerned with finding the determinants of expected returns for various assets).

You find an empirically meaningful bias (gee whiz! a new variable that explains returns) and then make up a story to explain it–but it’s basically atheoretical (I’m being unkind; sometimes there is a theory, but it is often stand-alone and hard to interpret relative to the baseline).