Modern Developments In Behavioral Economics

This book examines the field of behavioral economics and provides insights into the following questions: Does utility bring happiness?How do emotions and personal perspectives color our economic decisions?How do altruism, trust, fairness and justice come into play in game theory?Why are some organizations so successful in implementing their objectives?Can advances in neuroeconomics unlock the secrets of how decisions are made? The book looks at decision making and behavior from the point of view of (i) individual behavior and choice; (ii) group and interactive choice; and (iii) collective choices and decision making. In particular, it covers the following aspects: instances when bounded rationality leads to decisions inconsistent with standard economic assumptions; risk and the processes by which investors and consumers make decisions; altruistic and cooperative behavior as alternatives to competition; game theory as a way to explore motives of cooperation versus competition; the determinants of happiness and the relationship between utility and well-being; the concept of social capital, including motivations for charity and being a responsible citizen; how trust and fairness relate to economic actions and the motivation to cooperate rather than compete; behavior such as crime, corruption and bribery from ethical, social and economic viewpoints; and, finally, the decision making process of collective choice and how societies develop rules for governing themselves. This is the first book to bridge economics, psychology, sociology and political sciences and explain the nuanced subtleties of decision making.

Twenty years ago, behavioral economics did not exist as a field. Most economists were deeply skeptical--even antagonistic--toward the idea of importing insights from psychology into their field. Today, behavioral economics has become virtually mainstream. It is well represented in prominent journals and top economics departments, and behavioral economists, including several contributors to this volume, have garnered some of the most prestigious awards in the profession. This book assembles the most important papers on behavioral economics published since around 1990. Among the 25 articles are many that update and extend earlier foundational contributions, as well as cutting-edge papers that break new theoretical and empirical ground. Advances in Behavioral Economics will serve as the definitive one-volume resource for those who want to familiarize themselves with the new field or keep up-to-date with the latest developments. It will not only be a core text for students, but will be consulted widely by professional economists, as well as psychologists and social scientists with an interest in how behavioral insights are being applied in economics. The articles, which follow Colin Camerer and George Loewenstein's introduction, are by the editors, George A. Akerlof, Linda Babcock, Shlomo Benartzi, Vincent P. Crawford, Peter Diamond, Ernst Fehr, Robert H. Frank, Shane Frederick, Simon Gächter, David Genesove, Itzhak Gilboa, Uri Gneezy, Robert M. Hutchens, Daniel Kahneman, Jack L. Knetsch, David Laibson, Christopher Mayer, Terrance Odean, Ted O'Donoghue, Aldo Rustichini, David Schmeidler, Klaus M. Schmidt, Eldar Shafir, Hersh M. Shefrin, Chris Starmer, Richard H. Thaler, Amos Tversky, and Janet L. Yellen.

This book examines the field of behavioral economics and provides insights into the following questions: ? Does utility bring happiness?? How do emotions and personal perspectives color our economic decisions?? How do altruism, trust, fairness and justice come into play in game theory?? Why are some organizations so successful in implementing their objectives?? Can advances in neuroeconomics unlock the secrets of how decisions are made?The book looks at decision making and behavior from the point of view of (i) individual behavior and choice; (ii) group and interactive choice; and (iii) collective choices and decision making. In particular, it covers the following aspects: instances when bounded rationality leads to decisions inconsistent with standard economic assumptions; risk and the processes by which investors and consumers make decisions; altruistic and cooperative behavior as alternatives to competition; game theory as a way to explore motives of cooperation versus competition; the determinants of happiness and the relationship between utility and well-being; the concept of social capital, including motivations for charity and being a responsible citizen; how trust and fairness relate to economic actions and the motivation to cooperate rather than compete; behavior such as crime, corruption and bribery from ethical, social and economic viewpoints; and, finally, the decision making process of collective choice and how societies develop rules for governing themselves.This is the first book to bridge economics, psychology, sociology and political sciences and explain the nuanced subtleties of decision making.

This groundbreaking handbook of original works by leading behavioral economists is the first comprehensive articulation of behavioral economics theory. At a time when conventional approaches have failed to resolve key economic concerns, the book provides a provocative alternative view of how economic decisions are actually made.

At a time when both scholars and the public demand explanations and answers to key economic problems that conventional approaches have failed to resolve, this groundbreaking handbook of original works by leading behavioral economists offers the first comprehensive articulation of behavioral economics theory. Borrowing from the findings of psychologists, sociologists, political scientists, legal scholars, and biologists, among others, behavioral economists find that intelligent individuals often tend not to behave as effectively or efficiently in their economic decisions as long held by conventional wisdom. The manner in which individuals actually do behave critically depends on psychological, institutional, cultural, and even biological considerations. "Handbook of Contemporary Behavioral Economics" includes coverage of such critical areas as the Economic Agent, Context and Modeling, Decision Making, Experiments and Implications, Labor Issues, Household and Family Issues, Life and Death, Taxation, Ethical Investment and Tipping, and Behavioral Law and Macroeconomics. Each contribution includes an extensive bibliography.

Handbook of Behavioral Economics: Foundations and Applications presents the concepts and tools of behavioral economics. Its authors are all economists who share a belief that the objective of behavioral economics is to enrich, rather than to destroy or replace, standard economics. They provide authoritative perspectives on the value to economic inquiry of insights gained from psychology. Specific chapters in this first volume cover reference-dependent preferences, asset markets, household finance, corporate finance, public economics, industrial organization, and structural behavioural economics. This Handbook provides authoritative summaries by experts in respective subfields regarding where behavioral economics has been; what it has so far accomplished; and its promise for the future. This taking-stock is just what Behavioral Economics needs at this stage of its so-far successful career. Helps academic and non-academic economists understand recent, rapid changes in theoretical and empirical advances within behavioral economics Designed for economists already convinced of the benefits of behavioral economics and mainstream economists who feel threatened by new developments in behavioral economics Written for those who wish to become quickly acquainted with behavioral economics

Winner of the Nobel Prize in Economics Get ready to change the way you think about economics. Nobel laureate Richard H. Thaler has spent his career studying the radical notion that the central agents in the economy are humans—predictable, error-prone individuals. Misbehaving is his arresting, frequently hilarious account of the struggle to bring an academic discipline back down to earth—and change the way we think about economics, ourselves, and our world. Traditional economics assumes rational actors. Early in his research, Thaler realized these Spock-like automatons were nothing like real people. Whether buying a clock radio, selling basketball tickets, or applying for a mortgage, we all succumb to biases and make decisions that deviate from the standards of rationality assumed by economists. In other words, we misbehave. More importantly, our misbehavior has serious consequences. Dismissed at first by economists as an amusing sideshow, the study of human miscalculations and their effects on markets now drives efforts to make better decisions in our lives, our businesses, and our governments. Coupling recent discoveries in human psychology with a practical understanding of incentives and market behavior, Thaler enlightens readers about how to make smarter decisions in an increasingly mystifying world. He reveals how behavioral economic analysis opens up new ways to look at everything from household finance to assigning faculty offices in a new building, to TV game shows, the NFL draft, and businesses like Uber. Laced with antic stories of Thaler’s spirited battles with the bastions of traditional economic thinking, Misbehaving is a singular look into profound human foibles. When economics meets psychology, the implications for individuals, managers, and policy makers are both profound and entertaining. Shortlisted for the Financial Times & McKinsey Business Book of the Year Award

'The collected papers are with few exceptions intriguing, thought-provoking and creative, and they shed new light on old and important issues. Some of the contributions are revolutionary as they attempt to shake the foundations of standard of economics. . . the volume provides an inspiring read.' - Jean-Robert Tyran, Journal of Economic Psychology