Abstract
The paper analyses the methodology of economic lab experiments on human behaviour in the light of Barad’s ‘agential realism’. Experimenters conventionally think that experiments identify properties that human individuals have, independent from the experimental setting (the ‘preferences’ or ‘values’, etc.), so that lab results generalize for the entire reference population (cultural groups, species, etc.) in the field. To the contrary, I argue that economic experiments are performative, which means that experimenters, experimental subjects and experimental designs are entangled in one performative setting, following earlier analyses by Guala, Callon and others. I discuss the performativity of experiments in considering the mandatory use of monetary incentives as an instance of ‘priming’ and ‘framing’ with money, as established in psychological experimental research. I take this analysis one substantial step further in demonstrating that this view corresponds to Barad’s reconstruction of Niels Bohr’s philosophical evaluation of experiments in quantum physics, which eschew the notion of an independent ‘object’ having stable properties in favour of an ontology of ‘phenomena’. I suggest that this view is congenial to the conventional economic theory of ‘revealed preferences’. Then, Bohr’s principle of complementarity can be shown to apply also for economic phenomena, in particular the duality of individual and social preferences, which I relate to Tuomela’s philosophical analysis of ‘I mode’ and ‘We mode’ in human action. In this view, it is meaningless to ask whether experiments can finally provide evidence on which kind of preferences human beings have in general (even for one single individual); economic experiments can identify certain performative mechanisms that generate a specific kind of preferences in a particular context.
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Notes
- 1.
This definition follows the conception of naturalism in the philosophy of mind, see Papineau (2009).
- 2.
This view has been thoroughly developed by Guala (2007). In experimental economics as such, the notion of performativity has not yet arrived, even though in the methodological debates, following similar debates in psychology, the problem of the interaction between experimenters and experimental subjects looms large (Levitt and List 2007). This is mostly seen as a potential source of failure, therefore experimental economists typically try to minimize this interaction. I will argue that performativity is a general property of any experiment, and not a dysfunctional phenomenon.
- 3.
Although experimental economists rarely refer their methodological debates to concepts of the philosophy of science, reference to the covering law approach to theories is implicit in the majority of their statements, right from the early times, such as in Smith’s (1976) influential paper. For a more recent statement by a leader of the field, see Camerer (2015: 252), who refers to ‘general laws’, also citing Smith.
- 4.
My discussion is deeply influenced by Latour’s (2012) work on the modes how humans approach the world they live in and create worlds which are ontologically diverse. As in his earlier works, where Latour questioned the genuine ‘modernity’ of modern thinking, the idea is central that modern naturalism is naive in not reflecting upon the fact that what we perceive as ‘nature’ is actually created by ourselves, as we cannot go behind our own science in understanding what nature ‘is’. Hence, a genuinely modern view must be reflexive. However, this view does not lead towards subjectivist constructivism, as I develop below, and which transpires from Latour’s influential laboratory studies.
- 5.
For a concise statement on the alleged superiority of the economic approach, see Erev and Greiner (2015).
- 6.
My description of experimental procedures follows Böhme’s (2016) meticulous ethnographic records on how experiments are done, thus does not simply refer to the methodological standards, but to the practices. As in Muniesa and and Callon’s (2007) seminal study of auctions, this ethnographic perspective is necessary in order to identify the performative workings of experiments.
- 7.
This example is taken from Karlan (2005). The contextualization typically happens when subjects perceive the structure of the game as being similar to constellations of social interaction that they are familiar with in their everyday life. This applies for even the simplest games, such as the ultimatum game. The classical study of this phenomenon is Henrich et al. (2005). Tellingly, in his detailed defence of experimental economic methodology as the king’s way to generate information about general regularities in behaviour, Camerer (2015: 263) treats this problem of endogenous contextualization only very superficially, simply claiming that it is always possible to find appropriate controls in the econometric testing.
- 8.
- 9.
- 10.
As an example of money activating different frames, see Kouchaki et al. (2013). The classical sociological study of various categorizations of money is Zelizer (1997). Zelizer explicitly criticizes Simmel for assuming general social and psychological effects of money. So, her argument would apply for economics with a vengeance.
- 11.
- 12.
- 13.
For more detail on this, see Faye (2014). Barad also puts much emphasis on the Heisenberg/Bohr controversy, which was deeply driven by philosophical concerns. I closely follow Barad’s exposition and extensions.
- 14.
In Latour’s realist interpretation of laboratory practices, he also overcomes the conventional subject/object divide in assigning agency to objects, too (see Latour 2005: 63ff). Barad does not discuss possible connections to ANT in more detail.
- 15.
- 16.
For a pertinent discussion of the methodological status of preferences in economic theory, see Ross (2005: 104ff).
- 17.
Tuomela (1995, 2007). For the notion of team preferences, with a game-theoretic formalization, see Sugden (2000). The literature on collective intentionality is overviewed by Schweikard and Schmid (2013). This establishes a conceptual bridge between Tuomela and Searle; Searle (1995, 2010) plays an important role in the philosophical grounding of the performativity concept. Hence, we can put agential realism in a larger context of philosophical debates also closely related to economics, which I cannot pursue further here.
- 18.
Interestingly, this can be experimentally shown in research on altruism, see Kirman and Teschl (2010).
- 19.
There is no space to go into more details here, see my discussion in Herrmann-Pillath (2016b), referring to the overview by Bowles and Polonía-Reyes (2012). In this work, I present a semiotic model that introduces the notion of ‘bimodality’ which seems to be very close to the principle of complementarity. This systematizes Bowles and Polonía-Reyes’ observation that incentives always work in a twofold way, namely directly triggering a certain behaviour, but also providing information about contextual conditions of choices which result into a specific framing of the situation. For example, changing a negative social incentive (such as moral outrage) into an apparently similar pecuniary negative incentive (a fine) might shift the frame to a market exchange interpretation, so that the fine might even increase the incidence of deviant behaviour because individuals think they pay for it, so giving it legitimacy.
- 20.
Obviously, this might also be interpreted as a fixed property of subjects, though of a more abstract kind. So, Yamagishi’s approach needs further scrutiny. Yamagishi (2012) is an extensive survey of his work. On the concept of field-dependence, see Nisbett (2003). Interestingly, this is often explained in terms of agricultural ecologies and production settings, thus would reflect an interaction between cognitive structures and material environments, which have resulted in cognitive path-dependencies. I discuss these issues in detail in Herrmann-Pillath (2017).
- 21.
Smith (2003).
- 22.
I cannot delve into further discussions of the philosophy of science discourse that is pertinent here, but just keep it within the limits of Barad’s view. However, I mention that there is a close affinity to Ladyman and Ross’s (2007) ‘ontic structural realism’ which also eschews reference to objects and highlights generative powers of structures which can be grasped by concepts and formalism, as well as statistical methods. This is of direct interest here, because Ross has also proposed an externalist view on neuroeconomics and behavioural economics which argues against full reduction to internal properties of individuals.
- 23.
As an example for an economist‘s sophisticated reflection about this, see Kagel (2015). Kagel shows that the external validity of experiments very much depends on the way how learning processes are contextualized in the lab, and to which extent this contextualization matches with field conditions.
- 24.
On the relationship between experiments and market design, see Roth (2008). It is interesting to notice that market design can be also directly based on ‘mechanism design’, which is a purely theoretical field of economics, in the first place. Often mechanism design analysis is directly referred to the real world, without applying experiments in order to empirically validate the mechanisms. In my view, if mechanism design is systematically combined with experiments, we gain important insights into performativity.
- 25.
- 26.
- 27.
Davis (2010) gives a detailed and illuminating overview of the emergence of different strands of behavioural and experimental research in economics, as far as the implied notion of the individual is concerned. These historical developments deserve much attention, as they have deeply shaped the current understanding of experiments.
- 28.
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Herrmann-Pillath, C. (2019). Creating Social Ontology: On the Performative Nature of Economic Experiments. In: Kawagoe, T., Takizawa, H. (eds) Diversity of Experimental Methods in Economics. Springer, Singapore. https://doi.org/10.1007/978-981-13-6065-7_10
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