Behavioral Economics Concepts (original) (raw)
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Discussion of" Behavioral Economics"
2006
For me, economics is a collection of ideas and conventions which economists accept and use to reason with. Namely, it is a culture. Behavioral economics represents a transformation of that culture. Nonetheless, as pointed out by Camerer and Loewenstein (2003), its methods are pretty much the same as those introduced by the Game Theory revolution.
Behavioral Economics Versus Traditional Economics: Are They Very Different?
SSRN Electronic Journal, 2019
Behavioral economics, notably developed by Daniel Kahneman, Amos Tversky and Richard Thaler, has found consistent and pervasive anomalies in common people's daily behaviors. This paper has employed the concepts in traditional economics (e.g., choice, relative price, and opportunity cost) to analyze the anomalies found in behavioral economics. The results show that quite a few anomalies, such as preference reversal, isolation effect and sunk cost fallacy, do not exist. This is not to say that people always make rational choices. The findings of the paper conclude, however, that common people may not be as irrational as behavioral economists have suggested (in some situations, common people may act more like a rational economist).
Behavioral economics research and the foundations of economics
Five propositions on which economists and psychologists including behavioral economists are in agreement are presented, leading to a discussion about two kinds of rationality. After some comments on methodology and on concepts of fairness, I will discuss the question of wealth maximization versus the economics of survival, and their different implications for behavior.
Behavioral economics: Past, present, future
2004
Behavioral economics increases the explanatory power of economics by providing it with more realistic psychological foundations. This book consists of representative recent articles in behavioral economics. 1 Chapter 1 is intended to provide an introduction to the approach and methods of behavioral economics, and to some of its major findings, applications, and promising new directions. It also seeks to fill some unavoidable gaps in the chapters' coverage of topics.
Principles of (Behavioral) Economics
American Economic Review
Behavioral economics has become an important and integrated component of modern economics. Behavioral economists embrace the core principles of economics—optimization and equilibrium—and seek to develop and extend those ideas to make them more empirically accurate. Behavioral models assume that economic actors try to pick the best feasible option and those actors sometimes make mistakes. Behavioral ideas should be incorporated throughout the first-year undergraduate course. Instructors should also considering allocating a lecture (or more) to a focused discussion of behavioral concepts. We describe our approach to such a lecture, highlighting six modular principles and empirical examples that support them.
There are two reasons to go beyond Behavioral Economics. The first reason is that humans, as presented by this school, do not explain many critical economic problems. Behavioral Economics is not an alternative paradigm to traditional economics. It is only one of the New Schools of thought, that has risen due to the failure of the contemporary Neoclassical School to show that markets have a unique maximum welfare full employment equilibrium. Therefore, in order to delimit Behavioral Economics ́ contributions we need to look at the whole paradigm in economics, which today includes: the contemporary neoclassical paradigm plus all the New Schools of thought. The second reason is that humans, as described by Behavioral Economics, are not a good representation of mans ́ evolutionary characteristics. For Behavioral Economics, humans are emotional beings which often do not know what is best for them, and need the help of the government to make the choices which are truly convenient; and they display altruistic and social cooperative behavior, even in monetary transactions. But evolutionarily we are neither design to be emotional or rational, nor to be selfish or altruistic and socially cooperative. We are design to be flexible for survival purposes, and to display a wide range of behaviors.
Behavioral Economics: Where Is It Heading?
The addition of “behavioral” to economics has given rise to a highly successful field of research. But, is it just a fashionable new trend or is it here to stay? More to the point, how does it differ from its close relative psychology? To answer these questions, the present article considers what behavioral economics is, and where it started, with the aim of trying to forecast what the status of it will be in the future. In forecasting where behavioral economics might be heading, the argument proposed here is that the best clues can be found in psychological research. If, as has been proposed here, behavioral economics partners research trends in psychology, then the futures of both will almost certainly be moving in the same direction. Both are beginning to, and will start to rely on online tools/mobile phone applications to collect richer data revealing dynamic tends over long time horizons, and as technology continues to facilitate ways of looking at group behaviour online, then larger scale studies examining interactions amongst multiple groups of people will become the norm rather than the exception. More specifically this article speculates on the future research focus of researchers in behavioral economics and the extent to which this will overlap with psychological research on judgment and decision-making.
Four essays in behavioral economics
Universidade Nova de Lisboa, its faculty, program coordinators, and the administrative sta¤ for the encouraging research environment they created that resulted in this dissertation. I would also like to thank the participants of the conferences and seminars I attended. Financial supports from Fundação para a Ciência e a Tecnologia, Ph.D. fellowships under POCI 2010,