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Adam Smith, Behavioral Economist

  • Nava Ashraf
  • Colin F. Camerer
  • George Loewenstein

Adam Smith's psychological perspective in The Theory of Moral Sentiments is remarkably similar to "dual-process" frameworks advanced by psychologists, neuroscientists, and more recently by behavioral economists, based on behavioral data and detailed observations of brain functioning. It also anticipates a wide range of insights regarding phenomena such as loss aversion, willpower, and fairness that have been the focus of modern behavioral economics. This essay draws attention to some of these connections.

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Article provided by American Economic Association in its journal Journal of Economic Perspectives.

Volume (Year): 19 (2005)
Issue (Month): 3 (Summer)
Pages: 131-145

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Handle: RePEc:aea:jecper:v:19:y:2005:i:3:p:131-145
Note: DOI: 10.1257/089533005774357897
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  2. David Genesove & Christopher Mayer, . "Loss Aversion and Seller Behavior: Evidence from the Housing Market," Zell/Lurie Center Working Papers 323, Wharton School Samuel Zell and Robert Lurie Real Estate Center, University of Pennsylvania.
  3. George Loewenstein & Ted O'Donoghue & Matthew Rabin, 2001. "Projection Bias in Predicting Future Utility," General Economics and Teaching 0012003, EconWPA.
  4. Aviad Heifetz & Yossi Spiegel, 2000. "On the Evolutionary Emergence of Optimism," Discussion Papers 1304, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
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  10. Waldman, Michael, 1994. "Systematic Errors and the Theory of Natural Selection," American Economic Review, American Economic Association, vol. 84(3), pages 482-97, June.
  11. Laibson, David I., 1997. "Golden Eggs and Hyperbolic Discounting," Scholarly Articles 4481499, Harvard University Department of Economics.
  12. Vernon L. Smith, 1998. "The Two Faces of Adam Smith," Southern Economic Journal, Southern Economic Association, vol. 65(1), pages 2-19, July.
  13. Kahneman, Daniel & Knetsch, Jack L & Thaler, Richard H, 1990. "Experimental Tests of the Endowment Effect and the Coase Theorem," Journal of Political Economy, University of Chicago Press, vol. 98(6), pages 1325-48, December.
  14. H. M. Shefrin & Richard Thaler, 1977. "An Economic Theory of Self-Control," NBER Working Papers 0208, National Bureau of Economic Research, Inc.
  15. M. Keith Chen & Venkat Lakshminarayanan & Laurie Santos, 2005. "The Evolution of Our Preferences: Evidence from Capuchin-Monkey Trading Behavior," Cowles Foundation Discussion Papers 1524, Cowles Foundation for Research in Economics, Yale University.
  16. Ed Diener & Robert Biswas-Diener, 2002. "Will Money Increase Subjective Well-Being?," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 57(2), pages 119-169, February.
  17. Ernst Fehr & Simon Gaechter, 2000. "Fairness and Retaliation: The Economics of Reciprocity," CESifo Working Paper Series 336, CESifo Group Munich.
  18. Dan Lovallo & Colin Camerer, 1999. "Overconfidence and Excess Entry: An Experimental Approach," American Economic Review, American Economic Association, vol. 89(1), pages 306-318, March.
  19. Bruno S. Frey & Alois Stutzer, 2002. "What Can Economists Learn from Happiness Research?," Journal of Economic Literature, American Economic Association, vol. 40(2), pages 402-435, June.
  20. Boulding, Kenneth E, 1969. "Economics as a Moral Science," American Economic Review, American Economic Association, vol. 59(1), pages 1-12, March.
  21. Benabou, Roland & Pycia, Marek, 2002. "Dynamic inconsistency and self-control: a planner-doer interpretation," Economics Letters, Elsevier, vol. 77(3), pages 419-424, November.
  22. Bohnet, Iris & Frey, Bruno S., 1999. "The sound of silence in prisoner's dilemma and dictator games," Journal of Economic Behavior & Organization, Elsevier, vol. 38(1), pages 43-57, January.
  23. Terrance Odean, 1998. "Are Investors Reluctant to Realize Their Losses?," Journal of Finance, American Finance Association, vol. 53(5), pages 1775-1798, October.
  24. Eckel, Catherine C. & Grossman, Philip J., 1996. "Altruism in Anonymous Dictator Games," Games and Economic Behavior, Elsevier, vol. 16(2), pages 181-191, October.
  25. Colin Camerer & Linda Babcock & George Loewenstein & Richard Thaler, 1997. "Labor Supply of New York City Cabdrivers: One Day at a Time," The Quarterly Journal of Economics, Oxford University Press, vol. 112(2), pages 407-441.
  26. Davis, Harry L & Hoch, Stephen J & Ragsdale, E K Easton, 1986. " An Anchoring and Adjustment Model of Spousal Predictions," Journal of Consumer Research, Oxford University Press, vol. 13(1), pages 25-37, June.
  27. Thaler, Richard H, 1988. "The Ultimatum Game," Journal of Economic Perspectives, American Economic Association, vol. 2(4), pages 195-206, Fall.
  28. Amos Tversky & Daniel Kahneman, 1979. "Prospect Theory: An Analysis of Decision under Risk," Levine's Working Paper Archive 7656, David K. Levine.
  29. B. Douglas Bernheim & Antonio Rangel, 2004. "Addiction and Cue-Triggered Decision Processes," American Economic Review, American Economic Association, vol. 94(5), pages 1558-1590, December.
  30. Persky, Joseph, 1989. "Adam Smith's Invisible Hands," Journal of Economic Perspectives, American Economic Association, vol. 3(4), pages 195-201, Fall.
  31. Heifetz, A. & Spiegel, Y., 2000. "On the Evolutionary Emergence of Optimism," Papers 2000-24, Tel Aviv.
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