Is Behavioral Economics Going to Teach Itself Out of a Job?

Somewhat related: I always imagine
Richard Thaler as having a sort of
comical, high-pitched voice. Irrational?

Clearly, very few homo economicus live among us. And if one did, he'd probably be murdered for being such an incredibly selfish sociopath.

So the basic tenets of behavioral economics - that we need to adjust our axioms when modeling human behavior - make sense. They even have some really great adjustments to make to microeconomic models, with the weird kinks in indifference curves and the inevitable incorporation of reference points. However, one of the favorite topics of behavioral economists is irrationality, and on that front I think they will make a massive contribution to humanity and a withering, temporary one to economics.

Basically, if you explain to a bunch of people that they are stupid and why they are stupid and how they are stupid and examples of how it is hurting them, they are going to stop being stupid.

It's sort of (I guess?) a Campbell's Law problem, and it separates the wheat from the chaff in economic theory, in my opinion. The wheat is concepts like Nash Equilibrium, which are self-prophetic - once you know about Nash Equilibrium, you obey Nash Equilibrium, because you have a huge incentive to do so. Then the chaff is behavioral concepts such as confirmation bias or misapplied probability heuristics - once humans become aware of their tendency to do these stupid things, they stop doing them.

This means that behavioral economics could make a really big, positive impact on our planet. And there are definitely issues that come out of these experiments that may need to be built into our models (and really, if you've taken a decent micro course, already have been).

However, the knowledge of some of this stuff is going to make it untrue going forward.