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George Katona: A founding father of old behavioral economics

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  • Hosseini, Hamid

Abstract

Assuming the division of behavioral economics into old and new, the paper begins to argue that old behavioral economics began with the works of two giants – George Katuna and Herbert Simon during the 1950s and early 1960s. The contributors of Herbert Simon are well established, thanks to the popularity of bounded rationality and satisficing, and his being award Noble Prize in economics. However, economists are much less familiar with the contributions of George Katona that can be viewed as the father of behavioral economics. Furthermore, the author argues that Katona was also misunderstood by various economists when he was attempting to create a psychologically based economics that rejected the mechanistic psychology of neoclassical economics and introducing the survey method to economic research that he had been using in his experimental psychology research previously. He also had influenced various economists during their debates in the 1950s without given the credit for. Many historians of behavioral economics limit Katona's contributions to the start of behavioral economics only to his contributions to macroeconomics. However, the paper demonstrates that Katona's behavioral economics included his contributions to macroeconomics (bringing realism to Keynesian consumption function and consumption behavior), micro-economics (business behavior, the rationality assumption, etc.), public finance and economic policy, and his introduction of the survey method. To demonstrate these contributions, the author argues that Katona attempted to bring realism to economic analysis – through psychological concepts – beginning with his early days of research in Germany which coincided with German hyper inflation- and continued whether working at New school for Social Research, Chicago University's Cowles Commission, the U.S. Department of Agriculture, or the University of Michigan's Survey Research Center. The author also argues that Katona's contributions went through stages, depending upon what economic problem persisted at the time, what advertises he was facing, and what institution/organization he was associated with.

Suggested Citation

  • Hosseini, Hamid, 2011. "George Katona: A founding father of old behavioral economics," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 40(6), pages 977-984.
  • Handle: RePEc:eee:soceco:v:40:y:2011:i:6:p:977-984
    DOI: 10.1016/j.socec.2011.04.002
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    References listed on IDEAS

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    1. Warneryd, Karl-Erik, 1982. "The life and work of George Katona," Journal of Economic Psychology, Elsevier, vol. 2(1), pages 1-31.
    2. Yang, Bijou & Lester, David, 1995. "New directions for economics," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 24(3), pages 433-446.
    3. Hosseini, Hamid, 2003. "The arrival of behavioral economics: from Michigan, or the Carnegie School in the 1950s and the early 1960s?," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 32(4), pages 391-409, September.
    4. Esther-Mirjam Sent, 2004. "Behavioral Economics: How Psychology Made Its (Limited) Way Back Into Economics," History of Political Economy, Duke University Press, vol. 36(4), pages 735-760, Winter.
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    Citations

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    Cited by:

    1. Khandakar Elahi, 2014. "Behavioural controversy concerning homo economicus: a Humean perspective," The Journal of Philosophical Economics, Bucharest Academy of Economic Studies, The Journal of Philosophical Economics, vol. 7(2), May.
    2. Krzysztof Tymicki, 2013. "Zamierzenia prokreacyjne a mo¿liwoœæ ich realizacji w kontekœcie czynników biologicznych," Working Papers 56, Institute of Statistics and Demography, Warsaw School of Economics.
    3. John E. King, 2013. "Should post-Keynesians make a behavioural turn?," European Journal of Economics and Economic Policies: Intervention, Edward Elgar Publishing, vol. 10(2), pages 231-242.
    4. DeCicco, John & Yan, Ting & Keusch, Florian & Muñoz, Diego Horna & Neidert, Lisa, 2015. "U.S. consumer attitudes and expectations about energy," Energy Policy, Elsevier, vol. 86(C), pages 749-758.
    5. Tomasz Zalega, 2015. "Behavioural Economics as a New Trend in Economics – An Overview (Ekonomia behawioraln jako nowy nurt ekonomii - zarys problemtyki)," Research Reports, University of Warsaw, Faculty of Management, vol. 1(18), pages 7-25.

    More about this item

    Keywords

    Conventional economics; Behavioral economics; Old behavioral economics; Founding fathers; Cognitive psychology; Experimental psychology; Keynesian consumption function; Real behavior; Rationality; Expectations; Survey research center;

    JEL classification:

    • B29 - Schools of Economic Thought and Methodology - - History of Economic Thought since 1925 - - - Other
    • B31 - Schools of Economic Thought and Methodology - - History of Economic Thought: Individuals - - - Individuals
    • B59 - Schools of Economic Thought and Methodology - - Current Heterodox Approaches - - - Other

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