Pluralism in Economics

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Table of Contents
Question 1: Monism versus Pluralism in Economics4
Question 2: Change in Economics8
How does change come into existence?9
Change within Accounting & Control9
Question 3: Game theory13
Conclusions on Game theory and agency-problems15
Question 4: Behavioral Economics17
Influences of Behavioral Economics18
Securities Market (In)efficiency and Financial Reporting19
Question 5: Experimental Economics22
Levitt & List versus Camerer22
Additional insights23
Relevance and final comments24
Question 6: Neuroeconomics25
Economics versus psychology27
Conclusions on Neuroeconomics28
Question 7: Institutional Economics29
A comparison30
Oliver Williamson31
Elinor Ostrom31
Relevance and conclusions32
Question 8: The Economics of Happinness35
TED-talk Daniel Kahneman36
Conclusions on Happiness Economics37
Question 9: Evolutionary Economics39
Herbert Gintis39
Geoffrey Hodgson40
Question 10: The Noble Prize in Economics43
A plea for Richard Thaler44
A plea against Eugene Fama45

Question 1: Monism versus Pluralism in Economics

Some support pluralism. Others believe pluralism ought to be a transitory phase towards monism. Yet others support monism. Which argument do you find more compelling? Illustrate your point by considering a specific example from your area of specialization.

The ideas of the neoclassical approach strongly advocated monism in economics. Eventhough the distinction between orthodoxy and heterodoxy remains unclear, it is certain that neoclassical economics is considered orthodox. With the decline of neoclassical economics, due to weak fundamentals and the fall of general equilibrium theory, there was room for new approaches in economics to flourish. These approaches share one common characteristic: their ideas deviate from the ideas of neoclassical economics or the so-called holy trinity of: rationality, greed and equilibrium (Colander et al., 2004). Colander et al. (2004) state that economics is moving away from monism towards pluralism. They view the future of economics centered around: purposeful behavior, enlightened self-interest and sustainability. According to these authors changes in a discipline come from within, but are not noticed by insiders. Which view is dominant is determined by the elite of the profession. On the contrary Davis (2008) is a prononent of monism. He views the upcoming of new approaches within economics, defined as pluralism, as a transitional state of affairs and therefore temporary. In his view this state will lead to a new orthodoxy/new mainstream in the future, instead of a more pluralistic economics (Davis, 2008, p.2). Davis (2008) makes a distinction between diachronic and synchronic developments. The future of economics is determined by the view on how changes happen within economics. If a discipline is open to change it is considered synchronic, if it is less open to change it is considered diachronic. Davis (2008) is a prononent of diachronic developments (Sent, 2012). Another approach to the difference between monism and pluralism within economics can be found in the ideas of Kuhn (1962) presented in his book “The structure of scientific revolution”. According to Kuhn a paradigm shift occurs as follows: When there are anomalies within the dominant approach that cannot be resolved, this creates the opportunity for other approaches to develop that can resolve these anomalies. The approach that is viewed as the best alternative becomes the new dominant approach or based on the definition by Davis...
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