Article

Behavioral Economics

Guy Hochman and Shahar Ayal

in Psychology

ISBN: 9780199828340
Published online March 2013 | | DOI: http://dx.doi.org/10.1093/obo/9780199828340-0089
Behavioral Economics

More Like This

Show all results sharing these subjects:

  • Psychology
  • Cognitive Psychology
  • Developmental Psychology
  • Health Psychology
  • History and Systems in Psychology
  • Educational Psychology
  • Social Psychology

GO

Show Summary Details

Preview

Behavioral economics is concerned with the impact of psychological factors (e.g., motives, emotions) on economic decision making. Clearly, any economic decision is related to individual behavior. However, standard economics portrays individuals as rational agents who are self-interested and seek to maximize their personal utility. By contrast, behavioral economics recognizes that people do not always make rational decisions and thus aims to explain how and why people make the (rational and irrational) economic decisions they do. The field of behavioral economics emerged in response to an upsurge in well-documented behavioral anomalies and marked deviations from the standard economic models. By examining cognitive, emotional, and social aspects of the decision process, behavioral economics tries to predict actual behavior and provide important insights about the forces that shape economic decision making. In this sense, behavioral economics is more a school of thought than a distinct subfield of economics. Behavioral economics deals with such crucial questions as the type of choices that people make (and why they make them), how incentives affect behavior, the role of the format in which information is presented in the formation of preferences, ways in which people allocate money among different pools, and how people manage their savings as well as their debt accounts. Behavioral economics is a relatively new science that is nevertheless deeply rooted in older streams of decision making research. However, while the more general field of judgment and decision making is concerned with basic behavioral research that is more general and can be applied to diverse fields, behavioral economics is more specific to economic problems and principles. As such, it is more focused on providing practical policies and interventions that are aimed to help people become better decision makers. The sources included here represent a mix of recent and older work. The majority of the books, chapters, and articles cited here should provide interested readers with the opportunity to learn about this fascinating field and enable more experienced readers to discover recent advances and milestones in a field that fulfills a real need in today’s era of economic upheaval.

Article.  28048 words. 

Subjects: Psychology ; Cognitive Psychology ; Developmental Psychology ; Health Psychology ; History and Systems in Psychology ; Educational Psychology ; Social Psychology

Full text: subscription required

How to subscribe Recommend to my Librarian

Buy this work at Oxford University Press »

Users without a subscription are not able to see the full content. Please, subscribe or login to access all content.