Metaphors in economics

• The most important example of economic rhetoric… is metaphor. Economists call them ‘models’.
• Two primary market metaphors:
  • Agent metaphors
    • the NASDAQ climbed higher
      • living thing
      • Agent metaphors imply that the observed trend reflects an enduring internal goal or disposition and hence it is likely to continue tomorrow
  • Object metaphors
    • the NASDAQ dropped off a cliff
      • non-living things
      • Object metaphors do not imply that it reflects an internal force that will manifest itself again tomorrow
  • The researchers found that agent metaphors tend to be evoked by uptrends whereas object metaphors tend to be evoked by downtrends

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Remedy:

One way to tamp down expectations raised by agent metaphors is to display information as tables of numbers rather than in graph format(Visual metaphor)

Another way to limit expectancy bias is to mind your metaphors. The next time you hear “the NASDAQ climbed higher” or “dropped off a cliff,” remember this simply means that the NASDAQ increased or decreased, terms that don’t trigger such powerful metaphorical associations.

“Unexamined metaphor is a substitute for thinking—which is a recommendation to examine the metaphors, not to attempt the impossible by banishing them”

Metaphors evoke attitudes that are better kept in the open and under the control of reasoning.