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A synthesis of behavioural and mainstream economics

Author

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  • Robert J. Aumann

    (The Hebrew University of Jerusalem)

Abstract

Mainstream economic theory is based on the rationality assumption: that people act as best they can to promote their interests. In contrast, behavioural economics holds that people act by behavioural rules of thumb, often with poor results. We propose a synthesis according to which people indeed act by rules, which usually work well, but may work poorly in exceptional or contrived scenarios. The reason is that like physical features, behavioural rules are the product of evolutionary processes; and evolution works on the usual, the common—not the exception, not the contrived scenario.

Suggested Citation

  • Robert J. Aumann, 2019. "A synthesis of behavioural and mainstream economics," Nature Human Behaviour, Nature, vol. 3(7), pages 666-670, July.
    • Handle: RePEc:nat:nathum:v:3:y:2019:i:7:d:10.1038_s41562-019-0617-3
    DOI: 10.1038/s41562-019-0617-3
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    Citations

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    Cited by:

    1. Stephen Knowles & Maroš Servátka & Trudy Sullivan & Murat Genç, 2022. "Procrastination and the non‐monotonic effect of deadlines on task completion," Economic Inquiry, Western Economic Association International, vol. 60(2), pages 706-720, April.
    2. Evstigneev, Igor & Hens, Thorsten & Potapova, Valeriya & Schenk-Hoppé, Klaus R., 2020. "Behavioral equilibrium and evolutionary dynamics in asset markets," Journal of Mathematical Economics, Elsevier, vol. 91(C), pages 121-135.
    3. Knowles, Stephen & Servátka, Maroš & Sullivan, Trudy & Genç, Murat, 2021. "The Non-Monotonic Effect of Deadlines on Task Completion," MPRA Paper 109484, University Library of Munich, Germany.
    4. Enrique Urbano Arellano & Xinyang Wang, 2023. "Social Learning of General Rules," Papers 2310.15861, arXiv.org.
    5. Andersson, Lina, 2022. "Fear and Economic Behavior," Working Papers in Economics 819, University of Gothenburg, Department of Economics.
    6. Polowczyk Jan, 2021. "A synthesis of evolutionary and behavioural economics," Economics and Business Review, Sciendo, vol. 7(3), pages 16-34, September.
    7. Igor V. Evstigneev & Mohammad Javad Vanaei, 2022. "Evolutionary Behavioural Finance: A Model with Endogenous Asset Payoffs," Economics Discussion Paper Series 2202, Economics, The University of Manchester.
    8. Güth, Werner, 2021. "(Un)bounded rationality of decision deliberation," Journal of Economic Behavior & Organization, Elsevier, vol. 186(C), pages 364-372.
    9. Daniela Di Cagno & Lorenzo Ferrari & Werner Güth & Vittorio Larocca, 2021. "Transparent Dealing instead of Insider Haggling - Experimentally Analyzing an Institutional Choice for Repeated Trade," CEIS Research Paper 523, Tor Vergata University, CEIS, revised 18 Feb 2023.
    10. I. V. Evstigneev & T. Hens & M. J. Vanaei, 2023. "Evolutionary finance: a model with endogenous asset payoffs," Journal of Bioeconomics, Springer, vol. 25(2), pages 117-143, August.

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