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David Gal
OccupationProfessor

David Gal is Professor of Marketing at the University of Illinois at Chicago.[1] He is best known for his critiques of behavioral economics,[2] and in particular his critique of the behavioral economics concept of loss aversion.[3][4][5][6][7] His forthcoming book is titled The Power of the Status Quo.[8]

Academic career

Gal received his Ph.D. from Stanford University in 2007. He joined the faculty of The Kellogg School of Management at Northwestern University where he remained until 2014, at which time he joined the faculty of The University of Illinois at Chicago.[9]

His research has been published in Journal of Consumer Research, Journal of Marketing Research, Journal of Marketing, Judgment and Decision Making, Psychological Science, Management Science, and Journal of the American Statistical Association.[10] It has been featured in the New York Times,[11] Wall Street Journal,[12] The Toronto Star,[13] Time,[14] Harvard Business Review,[15] and The Globe and Mail[16], among other outlets.

He has been named among the most productive academic authors in the top marketing journals from 2013 to 2016.[17] He was named a Marketing Science Institute Young Scholar in 2013 and a Marketing Science Institute Scholar in 2018.[18]

Critique of Loss Aversion and Behavioral Economics

Loss aversion is the principle that losses loom larger than gains.[19] It was introduced by the economics Nobel Prize winner Daniel Kahneman and Amos Tversky in a 1979 paper that is the most cited in economics and third most cited in psychology.[20] Kahneman has subsequently stated “the concept of loss aversion is certainly the most significant contribution of psychology to behavioral economics.”[21] The phrase "loss aversion" also appeared 24 times in the Nobel Committee's description of Richard Thaler's contributions to science when discussing his 2017 Nobel Prize award.[22]

Gal has argued that loss aversion is not supported by the evidence and that most phenomena attributed to loss aversion have alternative explanations that are more consistent with the evidence. In particular, Gal has cited psychological inertia as an explanation for the endowment effect and status quo bias.[23][24]

In addition to his specific critique of loss aversion, Gal has argued that behavioral economics more broadly has been too concerned with understanding how behavior deviates from standard economic models rather than with understanding why people behave the way they do. Understanding why behavior occurs is necessary for the creation of generalizable knowledge, the goal of science. He has referred to behavioral economics as a triumph of marketing.[25]

References

  1. ^ "David Gal". UIC Business - University of Illinois at Chicago. 2015-08-13. Retrieved 2018-11-13.
  2. ^ "Opinion | Why Is Behavioral Economics So Popular?". Retrieved 2018-11-13.
  3. ^ Ritholtz, Barry (August 9, 2018). "A Challenge to the Biggest Idea in Behavioral Finance". Bloomberg. Retrieved November 13, 2018.
  4. ^ Gal, David. "Why the Most Important Idea in Behavioral Decision-Making Is a Fallacy". Scientific American Blog Network. Retrieved 2018-11-13.
  5. ^ Markey-Towler, Brendan. "Explainer: what is loss aversion and is it real?". The Conversation. Retrieved 2018-11-13.
  6. ^ "Do Losses Truly Hurt More Than Gains Feel Good?". Nerd's Eye View | Kitces.com. 2018-01-24. Retrieved 2018-11-13.
  7. ^ "Academics dispute challenge to loss-aversion theory | Professional Planner". Professional Planner. 2018-02-06. Retrieved 2018-11-13.
  8. ^ "Home | David Gal". Home | David Gal. Retrieved 2018-11-13.
  9. ^ "David Gal". UIC Business - University of Illinois at Chicago. 2015-08-13. Retrieved 2018-11-13.
  10. ^ "David Gal". UIC Business - University of Illinois at Chicago. 2015-08-13. Retrieved 2018-11-13.
  11. ^ Brooks, David. "Opinion | Social Science Palooza". Retrieved 2018-11-13.
  12. ^ "Week in Ideas: Christopher Shea". WSJ. Retrieved 2018-11-13.
  13. ^ "Concerned with looking tough, men opt for macho grub | The Star". thestar.com. Retrieved 2018-11-13.
  14. ^ White, Martha C. "The Verdict Is In: Tackle Smaller Debts First". Time. ISSN 0040-781X. Retrieved 2018-11-13.
  15. ^ "You Experience a Silent Rage After Exerting Self-Control". Harvard Business Review. 2013-05-21. Retrieved 2018-11-13.
  16. ^ "Dumb, blond ad; An unlikely alliance; and bias". Retrieved 2018-11-13.
  17. ^ "David Gal". UIC Business - University of Illinois at Chicago. 2015-08-13. Retrieved 2018-11-13.
  18. ^ "David Gal". UIC Business - University of Illinois at Chicago. 2015-08-13. Retrieved 2018-11-13.
  19. ^ Kahneman, Daniel; Tversky, Amos (1979). "Prospect Theory: An Analysis of Decision under Risk". Econometrica. 47 (2): 263–291. CiteSeerX 10.1.1.407.1910. doi:10.2307/1914185. JSTOR 1914185.
  20. ^ "[15] Citing Prospect Theory". Data Colada. 2014-02-10. Retrieved 2018-11-13.
  21. ^ Kahneman, Daniel (2011). Thinking, Fast and Slow. New York: Macmillan. p. 300. ISBN 978-1-4299-6935-2.
  22. ^ The Committee for the Prize in Economic Sciences in Memory of Alfred Nobel (October 9, 2017). "RICHARD H. THALER: INTEGRATING ECONOMICS WITH PSYCHOLOGY" (PDF). Nobelprize.org. Retrieved November 13, 2018.
  23. ^ Gal, David (July 2006). "A Psychological Law of Inertia and the Illusion of Loss Aversion" (PDF). SJDM.ORG. Retrieved November 13, 2018.
  24. ^ Gal, David; Rucker, Derek D. (2018-04-20). "The Loss of Loss Aversion: Will It Loom Larger Than Its Gain?". Journal of Consumer Psychology. 28 (3): 497–516. doi:10.1002/jcpy.1047. ISSN 1057-7408.
  25. ^ "Opinion | Why Is Behavioral Economics So Popular?". Retrieved 2018-11-13.
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