 Good afternoon. I have the honor, for which I thank Professor Hoppet to give the last speech today, the topic of riches on some new psychology facts in economics. And indeed, when economics is seen as similar in nature to natural sciences, as it is nowadays, it is likely to be exposed to permanent swings in research trends. That is, to new facts. This must be the case because the methodology of the natural sciences, empiricism, which is largely adopted nowadays in economics, implies a never-ending testing of assumptions in the quest of the valid one, that which will allow to make the better prediction. New facts then appear almost naturally, nourished by the discovery of new testing techniques or by the application of new assumptions. Now, this could well be viewed as the normal way of how science in general, and economics in particular, should make progress, if not for a major problem. This problem is that the very objective study of social sciences, that is human action itself, cannot be subject to any meaningful measurement and testing. Human action consists in preferring one choice to its possible alternatives, all of which are not only purely subjective and in permanent change, but also hidden to external observers. Yet it is precisely from this invisible and non-quantifiable relation between choice and its counterfactual alternatives that individual values, market prices, and most of economic laws are derived. Hence, it is not possible for any new knowledge in economics to come out of this empiricist, positivistic cradle. But then, when this cradle is professed, new facts must be resurrected errors. This is what I would like to show in two particular cases, that one of neuroeconomics and that other one of reciprocity economics. Both research areas have gained momentum and substantial popularity for the last two decades, especially under the leadership of Professor Ernst Fehr. Of Austrian descent, Professor Fehr is director of the Department of Economics at the University of Zurich, again, which is hosting the Laboratory for Experimental and Behavioral Economics, as well as the Laboratory for Social and Neurosystems Research. He has been recipient of the Marcel Bernard Prize in 2008, which is the Swiss equivalent to the Nobel Prize, and he has been suggested as a possible future laureate of the Nobel itself. Even though he has not published a treaty yet, which is something common for mainstream economists, he has produced an impressively long list of articles in the top economics journals. I will first deal with neuroeconomics, which purports to add a new measurement technique to the economics toolbox, and then I will turn to reciprocity economics, which proposes to replace the assumption of self-interested behavior by the hypothesis of social preferences. In the own words of Kevin McCabe, who is a leading expert in neuroeconomics, neuroeconomics is the study of how the embodied brain interacts with external environment to produce economic behavior. Research in this field will allow social scientists to better understand individual decision making and consequently to better predict economic behavior end of point. Neuroeconomic uses a number of brain imaging techniques, in particular PET scans, in order to determine how the brain regions and the neural circuits interact and communicate to determine individual behavior. By showing how the brain operates biologically and physiologically, it aims at improving the economist's assumption of just given preferences. It purports to enlarge standard economic theory by the inclusion of biological variables among the factors that determine individual behavior. Neuroeconomics is expected to be path breaking because a direct measurement of thoughts and the feelings would allow researchers to build a theory that would explain hitherto postulated preferences and beliefs. That way, the microeconomic foundations of economic theory would be made more solid. Professor Fer even believes that if a grand, unifying theory of economics would ever be achieved, it could only be done via research in neurobiology. The purported advantages of neuroeconomics are reminiscent of the early debates about the foundations of marginal utility. While Jevons expressed reservations about the major ability of utility, Edgeworth imagined the development of a hedonimeter that would exactly quantify the amount of happiness, pleasure, and of pain experienced by each individual. He also expressed the view that for utility analysis to become relevant for the real world and not just an abstract thinking, it should find a way to somehow measure utility. This is a view with which Fisher, who has contributed significantly to the development of mathematical economics, did not disagree. He doubted indeed about the possibility to find a direct psychological measure of utility, but yet he believed that utility could be indirectly inferred from the individual's observed choices, and this would be crucial for conducting welfare analysis. Now, the present-day neoclassical economics, even though it has abandoned the attempts to measure utility, still considers utility as an extendable and therefore measurable quantity. It assumes that the number of utils that is a variable quantity of something could be ascribed to any combination of bundles of goods and services. Then the individual's choice is being explained as the one that maximizes this quantity, other things such as prices and revenues being given as constraints. Neoclassical theory could avoid the search for an exact measure of utility because its interest has been elsewhere, namely in the explanation of choices. However, in doing so, it has accepted to be grounded in a psychophysical conception of utility within which it was bound to remain a pure theory of choices. As a matter of fact, by its very research program, namely the explanation of choices, neoclassical economics is akin to a branch of psychology, a kind of mathematical psychology. From this point of view, the integration of neoclassical economics with neurobiology into the new field of neuroeconomics appears internally consistent. Yet the crucial point is that another approach to utility theory and to economics in general is not only possible, but appears to be significantly more fruitful. The Austrian theory of economics has developed a subjective value theory that is fully independent of psychological and mathematical assumptions. Starting from the observation that the acting individual ranks the satisfaction of his subjective needs, it is a straightforward conclusion that the last available unit of a given resource will be used for the satisfaction for the less valued goal. The decreasing marginal utility then is no longer a mere assumption that should be tested indefinitely. It becomes a logically necessary implication of the very concept of human action. And this praxeological economics is not concerned with explaining choices, but with explaining the logically necessary implications of the very fact of human action, of which choices are just the visible part. Praxeological economics thus achieves the separation of economics from both psychology and the natural sciences, and results in the development of a very specific and unique kind of knowledge. Moreover, it relies on logical thinking about a near-refeatable evidence, namely the reality of human action. And because of this, its reasoning to the extent that it avoids any logical error implies the discovery of laws of human action that are applicable without any distinction to time, place, race, or gender. Progress in economics is then achieved when logical errors are corrected or when hitter-to-unforeseen implications of human action are being spelled out. The key point is that praxeological economics, which has developed quite elaborate theories and relevant also for the real world of prices, capital, investment, economic fluctuations, is indifferent to the motives behind individual choices. But what then is the possible positive contribution of neurobiology and neuroeconomics to praxeological economics? Simply none. Neurobiology could neither invalidate nor confirm any of the causal relations established by praxeological economics. Even if it ever managed to define a perfect correspondence between neurobiological processes and individual choices, still it is doubtful that this would improve our capacity to make less uncertain predictions. First, future prices do not depend exclusively on individual choices. But they are also influenced by changes in the very circumstances of action, some of which are completely outside of human control. Second, the human mind is not the last black box to be opened before discovering the deterministic laws that govern the universe, if any. One will still have to discover the laws that determine any single configuration of those factors which govern the neurobiological processes. As it could then be expected, the innovations contributed by neuroeconomics up to date are rather meager. Let me refer to what I found to be the two most relevant discoveries. First, brain scans suggest that monetary gains and losses activate similar reward areas in the brain as the so-called primary reinforces, like food and drugs. This, according to neuroeconomists, implies that, quote, money confers direct utility rather than simply being valued only for what it can buy, end of quote. Well, this conclusion was reached by Ludwig von Mises already in the 1940s. Actually, Mises went much beyond and developed a detailed analysis of the determinants of money and money certificates value in the very different cases of commodity, credit, and fiat monies. The neurobiological discovery that money is independently valued strikes by the absence of any discussion of the implications of this discovery. For the sake of a second example, experimental neurological tests suggest that backward induction may be neutrally unnatural. This would imply that game theory may be using an unrealistic concept for finding out the outcome of strategic interactions. Once again, while this might be troubling for game theory, none of the deductions of praxeological economics depend on the use of backward induction. If anything, individuals' forward-looking expectations are what matters, for instance, for the formation of prices of durable goods or of financial assets. Let me now turn to the second psychological fact, namely reciprocity economics. Reciprocity economics, of which Professor Fer is the originator and the world-renowned promoter, is grounded in the observation that individual behavior is not guided exclusively by selfish material motivations. It replaces the neoclassical assumption of homo-economics, that is of a selfish individual interested exclusively in his own material well-being, by the assumption that individual preferences are social or other regarding. In other words, the individual is concerned also with his material situation relative to other, so-called reference agents. Social preferences may be of different types. They may be a preference for reciprocal fairness, for inequity aversion, for pure altruism, or just envious preferences. In short, social preferences consist in a positive or a negative reciprocity towards others. In reality, both selfish and socially-motivated individuals are assessed to coexist, and part of the research agenda is to determine which type of preferences is prevailing in the social outcome. The primary goal of reciprocity economics is to increase the degree of realism of neoclassical economics by diversifying the types of behavior that are being analyzed. Now, the starting point of this approach is laboratory experiments of interactions between individuals as stylized by game theory. Game theory predicts that in the so-called ultimatum game, where a proposer must offer to a responder a distribution of a given resource, the proposer will always offer a tiny fraction to the responder who will accept the deal because it still makes him better off than getting nothing. A similar reasoning implies that in the public good game where individuals must choose which fraction of their income will contribute to the provision of a public good, no public good would ever be privately provided. When these types of interactions are tested in laboratories, the experimental results suggest systematically actually systematically contradict the game theoretical predictions. For instance, it appears that about half of the ultimatum interactions reject a proposal for redistributing less than 20% of the pie. Reciprocity economics takes these contradictions for a confirmation that individuals are not motivated exclusively by selfish preferences, but they also take care for others too. At the second stage, new game theoretical conclusions are derived mathematically from this new assumption that individuals have reciprocal preferences. And finally, these new predictions are again tested in laboratories in order to validate the theoretical predictions under the new assumption that is of the new model. Hence, reciprocity economics is a branch of experimental behavioral economics. Experimental economists fully accept the positivistic cradle, but maintain that data available from the directly observed reality, the so-called field data, does not allow for a proper testing of assumptions and thereby validation of theories because of the multitude of factors being involved. They see the controlled environment of laboratory tests where supposedly the intervals of a single factor is being isolated as a refinement in methods. Now, notwithstanding the overwhelming success of this approach, controlled experiments in economics raise a number of issues. First and foremost, is it really purposeful human behavior that is being examined in experimental games? Action means choosing between alternative goals and therefore using scarce resources. It can be conceived of only in a world where individuals do not have complete knowledge of the future. Action by necessity spans over the temporal flux if only because past choices have a definitive and irrevocable impact on the present and the future. Hence, human action cannot be contained into a single isolated point of time. It is always planning for the future. Now, controlled experiments by construction fail to reproduce these crucial features of human action. Reciprocity games are explicitly designed as one-shot interactions for otherwise the experimental divergence from the predictions of the self-interest assumption could be attributed to individuals in tensions to build long-term relationships and not anymore simply to reciprocity preferences. More fundamentally, experiments cannot grasp the notion of loss in heads of profit and uncertainty as participating individuals are not putting their own property at stake. Participants can never exit an experiment with less wealth than they entered into. These considerations lead to a crucial question. To what extent data generated by controlled experiments could possibly hold the purified essence of the much too complex real world? To raise the question, in a sense, is to answer it. Economic experiments do not reproduce reality into a controlled and analytically simplified environment. Rather, they misrepresent it by means of artificial interactions that are inspired by mathematical game theory. Some of these interactions, for instance, the ultimatum game, have no relevance whatsoever for the voluntary exchange transactions of the real world. The data generated by such experiments is not at all a proxy for reality. This in itself implies the failure of reciprocity economics to bring more realism into the neoclassical analysis. But also, how can the experimental economists be sure that all participants, even though they share a common knowledge of the rules of the game, interpret the game and other's actions identically? Each participant enters a game with his prior experience of the world and his own expectations for it, and also with the knowledge that he is simply playing a game. Hence, there can be no guarantee that participants are not at all playing a different game, each of them. This implies that the most basic assumption of reciprocity economics, namely that a particular type of motivations is being tested, is invalid. Individuals may well be moved by social preferences, but this cannot be controlled for in a laboratory experiment. What is then the positive contribution to praxeological economics of the analysis of reciprocal preferences and of behavioral experiments in general? Simply none. Praxeological economics is not built on any particular assumption about the actual content of individual preferences and motivations. It develops a price theory in which it does not matter whether one is buying a Peugeot car because he wants to resemble to his French neighbor or out of calculated hatred for the competitiveness of Germany's car industry. All that matters for price theory is that a Peugeot, rather than a Mercedes, is chosen. Once again, it is actually the Austrian's greatest achievement to have freed economics from psychology and erected it into a specific branch of knowledge about the individual and society. Yet, behavioral economics appears as a legitimate endeavor within the neoclassical approach. This approach is not neutral to individual's preferences. It does give an exclusively materialistic content to the post-it of self-interest, partially due to its mathematical and formalistic inclination. In this analytical framework, it makes sense, or at least so it appears, to enlarge the notion of self-interest. But then, why not adopt praxeological economics from the very outset, given that it has not imprisoned itself into a narrow conception of the self? According to Professor Fair, reciprocity economics has applications to a number of areas, most notably the provision of public goods, implicit contracts, wage rigidity, and the optimal allocation of ownership rights. Now, I could not go here through a detailed analysis of the reasoning behind all of these applications, but I believe that a more detailed analysis would undoubtedly conclude that the entire approach exhibits a bias for collectivism. This must be the case because the notion of reciprocal behavior is not value-free. Indeed, when the economist defines of scale of individual preferences relative to others' well-being, he is de facto making a venue judgment as to how people should feel about others and how they should act accordingly. At the outset, the notion of a preference or fairness or for inequity aversion may appear quite general and deprived from a netical meaning, but in order for these concepts to become operational, they must receive a more precise meaning, in particular in terms of wealth distribution. Professor Fair has then no problem to declare that, quote, in experimental games, a natural first approximation for the relevant reference outcome is the equality of material payoffs, end of quote. Fairness then becomes equated with egalitarianism and this is what it is all about in reciprocity economics. As it could be expected, its proponents do not attempt to explain how individuals heterogeneous capacities, intentions, and beliefs could naturally result in egalitarianism ever becoming the motivation that drives action or simply what is unfair with inequality. Fundamentally, egalitarian preferences are rooted in Professor Fair's neglect for private property rights. Indeed, in what he sees as one of the main applications of his approach, public goods would not be under provisioned in a voluntary cooperation setup if non-contributors know that there would be retaliation against them by contributors who would feel their preference for fairness has been hurt. This same line of reasoning leads to the conclusion that the threat of retaliation, which is really rooted in the fairness preferences being hurt, is a powerful implicit conflict in Folsom that would make material incentives that is conventional contractual obligations superfluous if not harmful. However, what is retaliation not foreseen by a contract if not a sheer instance of violence? This is immediately obvious in the public goods setup where retaliation takes the form of a monetary penalty imposed on non-contributors by contributors. How could such a setup, which de facto allows for forced taxation, ever qualify for a case of voluntary cooperation? The modeling of fairness preferences as preference for egalitarianism is not merely a side issue. Reciprocity economics is trying to explain social outcomes by the particular type of individual's preferences. By ascribing a specific ethical content to these preferences, Professor Fer is no longer conducting an impartial analysis. As a matter of fact, he is legitimizing concrete social norms, namely the acceptability of forceful expropriation. This is in full contradiction with the Austrian value-free approach, which is the greatest achievement of subjectivist analysis that made it possible for economics to expand as a positive science. In a sense, reciprocity economics is a case of regression from economics. In conclusion, both neuro and reciprocity economics are grounded in a conception of our science that sees the explanation and prediction of human behavior as its main task. This indeed has been the main research project of neoclassical economics, which from its very beginning has been rooted in a psychophysical theory of utility and value. Hence, these two facts are fully consistent with the empiricist understanding of scientific progress. The trouble, however, is that economics is not an empirical science. Accordingly, neuroeconomics and reciprocity economics can hardly be seen as an improvement of our existing knowledge. If anything, they keep alive persistent errors. But I believe a greater bet should be awaited from this type of multidisciplinary research that Professor Ferre and others are actively promoting. This whole multidisciplinary endeavor consists in grounding the same object, scope, and method to both economics and psychology and even beyond. Such an attitude goes against the very basics of a scientific approach which tries, first and foremost, to delimit and classify what is subject to inquiry and how inquiries should be conducted. The psychology and economics multidisciplinary facts fundamentally reject this conception of science. Nothing but loss of knowledge would be expected from it. And this in itself, I believe, is another strong reason to reject these facts. Thank you.