Discussion Paper

No. 2014-37 | September 24, 2014
Anchoring in Economics: On Frey and Gallus on the Aggregation of Behavioural Anomalies
(Published in Special Issue Economics, Psychology and Choice Theory)


This paper examines the research area identified by Frey and Gallus (Aggregate Effects of Behavioral Anomalies: A New Research Area, 2014) and the relationship between it and the choices that economists make. It supports the Frey and Gallus view that, as a consequence of individuals employing external inputs rather than relying upon their own judgemental capacities, the quality of decision-making may differ at the market and macro levels from what has been observed in laboratory experiments. It seeks to forestall potential moves by rational choice theorists to argue that such processes, imposed by competitive pressures, will swiftly eliminate anomalous behaviour. But it questions Frey and Gallus’s use of conventional rational choice theory as the reference point for judging the quality of real-world decisions. It argues that choice is an activity based on evolving sets of habits and rules, rather than based on give preference systems, and that Frey and Gallus’s failure to consider alternative reference points is itself a manifestation of anchoring.

JEL Classification:

A10, B00, D70


  • Downloads: 1229


Cite As

Peter E. Earl (2014). Anchoring in Economics: On Frey and Gallus on the Aggregation of Behavioural Anomalies. Economics Discussion Papers, No 2014-37, Kiel Institute for the World Economy. http://www.economics-ejournal.org/economics/discussionpapers/2014-37

Comments and Questions

Andy Denis, City University London - Referee report 1
October 09, 2014 - 09:34

see attached file

Peter E. Earl - Reply to report 1
October 10, 2014 - 09:01

see attached file

Bruno S. Frey and Jana Gallus - Answer to Peter E. Earl
October 14, 2014 - 12:01

see attached file

Anonymous - Referee report 2
October 15, 2014 - 12:09

see attached file

Peter E. Earl - Reply to referee 2
October 17, 2014 - 11:05

see attached file

Peter E. Earl - Reply to Comment Frey / Gallus
October 22, 2014 - 09:33

See attached file

Peter E. Earl - Revised version
February 18, 2015 - 09:33

see attached file

Andy Denis, City University London - Report on revised version 1
February 18, 2015 - 09:51

This is an interesting article, which I believe has been substantially improved. At nearly 10K words, it’s quite long, as you point out, but that’s an editorial matter, not one for referees. I don’t have a problem with its length – it is not as if there were ...[more]

... much that is obviously redundant and can be costlessly eliminated. I enjoyed reading it.

I am unconvinced that one can properly deal with the Frey-Gallus position without raising the impossibility of reconstructing the macro from the micro, but that is a legitimate difference between scholars, not a matter of deficient quality in the paper.

I did not find the infinite regress argument or the cartographical analogy very convincing, and it is possible Earl may be able to strengthen them in final corrections.

There are too many typos. On one occasion there were 3 on a single line.

Gary Mongiovi, St John's University - Report on revised version 2
February 18, 2015 - 09:54

see attached file