The official due date for draft three was August 1, and while I felt I met that due date, I continued to tweak the paper until I posted it on ssrn on August 3: be the first to see Prospero Theory: Behavioral Economics and Shakesepare here.
Here's the Abstract:
Prospect theory, a mainstay model of behavioral economics, was designed by Kahneman and Tversky (1979) to offer a better descriptive account of human decision making than that provided by rational choice theory -- and in many instances, it seems to deliver on its originators' goal. Descriptions of plausible human behavior, then, should generally accord well with the features of prospect theory. The writings of William Shakespeare -- an acclaimed observer of humanity -- provide a classic data set of human behavior that can be tested for its adherence to prospect theory. This paper explores Shakespeare's works, finding that the main elements of prospect theory-reference point dependence, loss aversion, and asymmetric gain/loss risk preferences are well represented within the Shakespeare canon. A second branch of behavioral economics, that examining happiness or "subjective wellbeing," also is reviewed in light of Shakespeare's works. Finally, Adam Smith, another acclaimed observer of humanity (who lived a little bit closer to Shakespeare's time than to ours), offers some parallel behavioral commentary, too.
Not sure about next steps -- Propspero Theory is not to everyone's taste, of that I am well assured. But I imagine I will send it to journal in the not too distant future, in something quite close to the current state.
I have made two intemperate claims that I would begin to work on a formal book prospectus on Shakespeare and Economics. I will re-up that claim now, and set August 15, 2025, as the deadline for reporting back. Yes, I am so chuffed with the revivification of Five Drafts that I plan to keep it active....
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