Academic journal articles:
A needed amendment that explains too much and resolves little. Behavioral and Brain Sciences, 2019 (42) (with Z. Buturovic).
Baumard's application of Life History Theory to explain the origins of economic growth is a needed amendment to incentive-based explanations of modern economics. However, even though it is grounded in evolution, the theory does not do enough to specify the relevant evolutionary mechanisms. As such, it accommodates too many alternative historic scenarios, yet remains unable to explain divergent regional patterns of economic growth.
The Pitfalls of Legislative and Executive Policymaking Compared to Judge-Made Law. The Journal of Private Enterprise, 2016, 31(4): 43-63.
This article uses insights from cognitive psychology to contrast judge-made law with legislative and executive policy-making. I argue that the predominant narrow conception of reason and rationality have led to overly optimistic views of deliberate policymaking at the expense of traditional judge-made law. However, alternative views of what constitutes rationality suggest that judge-made law may have some often overlooked advantages to deliberate policymaking.
Kahneman’s Failed Revolution against Economic Orthodoxy. Critical Review 2015, 27(2): 127-145 (with Zeljka Buturovic).
The work of Daniel Kahneman and his colleagues has established that people do not always think and act “rationally.” However, this amounts to saying that Kahneman and his collaborators interpret people’s behavior in experimental settings to be inconsistent with the narrow understanding of rationality deployed by orthodox neoclassical economists. Whether this means that people make poor decisions in the real world, however, has not been demonstrated, a fact that calls into doubt the significance of the list of heuristics and biases generated by behavioral economists. Dual-process (System 1/System 2) theory was meant to give theoretical coherence to this list, but its empirical foundation, too, retains the premises of “rational” choice as an ideal.
Behavioral Public Choice and the Law. West Virginia Law Review, 2015. Vol 118(1): 199-266 (with Gary M. Lucas).
This article reviews the findings of behavioral public choice and explaining their implications for the law and legal institutions. We discuss the various biases and heuristics that lead political actors to support and adopt bad laws and describe how limited knowledge and rationality influence specific areas of the law, including tax, antitrust, consumer protection, corporate, and employment law. Our goal is to introduce this new field of research to legal scholars, most of whom have previously ignored it. Familiarity with behavioral public choice will help legal scholars better understand the types of policies that are likely to emerge from real-world political processes and will facilitate efforts to promote realistic policy reform.
Classical Liberal Economics in the Ex-Yugoslavian Nations. Econ Journal Watch 2015, 12(2): 260–273 (with Miroslav Prokopijevic).
The ideology of classical liberalism has been present in the territory of the former Yugoslavia since the late 19th century, but its flourishing has been impeded by the region’s tumultuous history, prolonged nation-building, wars, and a communist dictatorship. In the post-communist transition, classical liberalism is being rediscovered. Classical liberal economists today are in the minority, but their media presence is relatively strong and their impact on opinion and policymaking is noticeable. Academic economics is on average less market-oriented than in the American academic scene, but it is more policy-oriented and practical.
Mind Matters. Kyklos 2013 66(3): 403-416.
If the published version is gated for you, try my preliminary draft.
Abstract: This paper argues that two different worldviews may be identified in economics and hypothesizes about the origins of this differentiation. I argue that the differences in economic worldviews go beyond technical academic, methodological or ideological distinctions; instead, they may be related to both old conceptions of the two types of mind and some newer findings in cognitive neuroscience. In particular, I analyze the recent developments in economics from the brain lateralization point of view and argue that some salient trends in economic thought are largely compatible with the hypothesis of the increased left brain hemisphere dominance.
Are Regulators Rational? Journal des Economistes et des Etudes Humaines 2011, 17(1): 1-21.
Abstract: Thus far, psychological input has been used in economics mainly to highlight the cognitive imperfections of market participants. The normative implication of behavioral economics in its current state is that imperfections of market participants should be rectified by psychologically informed regulators. However, regulators are themselves imperfect actors with limited cognitive capacities. I propose some biases and illusions documented by cognitive psychologists that may be relevant to the political economy of government regulation.
(Matt Ridley’s write-up about this paper for the Wall Street Journal is here: Studying the Biases of Bureaucrats.)
The Modern Growth of Government Springs More from Ideas Than from Vested Interests, The Independent Review: A Journal of Political Economy 2010 14(4): 549-568.
Abstract: According to a recent survey, a large majority of the members of the American Economic Association believes that special interests play a major role in policy formulation. John Maynard Keynes may have been closer to the truth, however, when he wrote, “it is ideas, not vested interests, which are dangerous for good or evil.”
The Illusion of Regulatory Competence Critical Review: A Journal of Politics and Society. 2009 21(4): 423-436.
Abstract: The illusion of explanatory depth, which has been identified by cognitive psychologists, may play a prominent role in encouraging regulatory action. This special type of overconfidence would logically lead regulators to believe that they are aware of the relevant causes and consequences of the activities they might regulate, and of the unintended side effects of the regulatory actions they are contemplating. So, as with other cognitive biases, the illusion of explanatory depth is likely to lead to mistakes. And unlike the biases that have been the focus of so much behavioral economics, the illusion of explanatory depth is uniquely resistant to correction by those who are aware of it as a general problem and rigorously attempt to keep it under control.
Working papers:
Decision-making under Uncertainty: Action-hesitancy Model (with Zeljka Buturovic).
Abstract: Neoclassical and behavioral economics rest on consequentialist maximization models of decision-making. This approach has been criticized for both the lack of realism and empirical inconsistencies but there are few viable substitutes. We propose a novel decision-making theory, the action-hesitancy model, aimed at articulating a non-consequentialist alternative to present models. According to this model, instead of maximizing any particular goal, agents strive to achieve cognitive clarity when making a decision. When hesitant, they seek new information in order to transform the appraisal of their situation in such a way as to make the course of action obvious. We argue that the action-hesitancy model is a realistic representation of decision-making capable of addressing a broad class of behavioral phenomena.
Contributions to Books:
Economic Regulation in Serbia: Theory and Practice (with Marko Paunovic). In Aleksandra Jovanovic & Ljubomir Madzar, eds. Law, rules and economic performance, University of Belgrade Faculty of Law, Belgrade, 2013.
In this paper we present the basics of the theory of regulation and analyze the practice of contemporary economic regulation in Serbia. Standard neoclassical economics offers several justifications for regulation, while alternative theories, such as public choice, Austrian economics and parts of behavioral economics, point to many deficiencies of these justifications. However, looking at the practice of economic regulation in general and the case of Serbia in particular, specifically, we observe that decisions on introducing regulation do not rest on either mainstream economic or any other theoretical justifications for regulation.
Books (in Serbian):
Šta je kapitalizam? I zašto nam je potreban. Belgrade: Heliks, 2017.
What is Capitalism? And Why We Need It. The guiding idea of the book is to present a view of capitalism as a spontaneous, organic and evolving order rather than a deliberately conceived and organized "system". It describes the sudden rise in the living standards in the past two centuries and argues that the causes of such increase lie in certain institutions, ideas, and values first emerged in the West. The readers is introduced to the main economic and classical liberal arguments explaining the success of capitalism and comparative failure of its alternatives. The book then follows the functioning of the market economy in the modern era, outlines the current debates centered around income inequality, regulation, and financial sector instability, and examines the differences between the American, European, and developing economies today.
Svetska ekonomska kriza: dileme i resenja. Belgrade: Sluzbeni glasnik, 2013.
Titled The World Financial Crisis: Dilemmas and Solutions, the book explores the causes of the global financial crisis from 2008, monetary and fiscal policy responses to the crisis, and the heated macroeconomic debates about the causes and policy responses to the crises in the USA and the Eurozone. The book argues that international financial regulation, as well as national regulatory rules in the US and the Eurozone, contributed to the development of the crisis by homogenizing the behavior of market participants and steering them towards investing in assets erroneously deemed nearly riskless. The ensuing Great Recessions and the intellectual debates about its resolution may be best understood as an extension of the classic Keynesianism v. monetarism debates of the 20th century, and the book places the arguments for fiscal and monetary policy solutions (fiscal stimuli, QEs) in the context of competing macroeconomic schools of thought. The book has been widely read, used in university courses, and voted first runner-up for a prize awarded to the best national non-fiction book.