Chapter

Behavioral Economics: Exceeding the Limits of  Traditional Neoclassical Models

Paul W. Glimcher

in Foundations of Neuroeconomic Analysis

Published in print November 2010 | ISBN: 9780199744251
Published online January 2011 | e-ISBN: 9780199863433 | DOI: http://dx.doi.org/10.1093/acprof:oso/9780199744251.003.0005
Behavioral Economics: Exceeding the Limits of  Traditional Neoclassical Models

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This chapter highlights several of the important decision-related phenomena that are poorly described by the neoclassical approach, and reviews the existing responses of economists and psychologists to such challenges. It argues that until fairly recently, decision-scientists have tended to fall into one of three categories. The first of these categories of scholars are “the deniers,” who argue that no significant phenomena at variance with the traditional neoclassical program have yet been identified. The second of these groups of scholars, “the naysayers,” asserts that the discovery of phenomena poorly predicted by traditional neoclassical models deals a fatal blow to the axiomatic basis of economic thought, and hence to any effort at a reductive linkage of these models to psychology or neuroscience. The third group of scholars, “the middle grounders,” argue that the addition of new adjustable parameters to models originally associated with axioms will be the most valuable strategy for the future.

Keywords: decision-related phenomena; neoclassical models; decision-scientists; deniers; naysayers; middle grounders

Chapter.  8295 words.  Illustrated.

Subjects: Neuropsychology

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