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Aggregate effects of behavioral anomalies: A new research area

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Listed author(s):
  • Frey, Bruno S.
  • Gallus, Jana

Abstract

Much recent research in economics focuses on exploring behavioral anomalies, i.e., systematic deviations from the assumptions of the rationally self-interested model of man. Laboratory studies are used to identify seeming inconsistencies with micro-economic theory on the level of individuals. Since economics is a social science, this article proposes that the next crucial step consists in shifting the focus to the macro-level. It examines the process through which behavioral anomalies are aggregated to a societal outcome. Since individuals are reactive when they interact with others and face institutional constraints, the aggregation process may lead to different outcomes than what has been observed in individual-level studies: the respective anomalies may disappear, or they may become stronger on the macro-level. The discussion demonstrates that there are a great number of aspects to be analyzed. The paper presents fragments of what could become a more extensive field of research.

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File URL: http://dx.doi.org/10.5018/economics-ejournal.ja.2014-18
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File URL: https://www.econstor.eu/bitstream/10419/97028/1/782791026.pdf
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Article provided by Kiel Institute for the World Economy (IfW) in its journal Economics: The Open-Access, Open-Assessment E-Journal.

Volume (Year): 8 (2014)
Issue (Month): ()
Pages: 1-15

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Handle: RePEc:zbw:ifweej:201418
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Keywords: Economics and psychology; behavioral economics; behavioral anomalies; reactivity;

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Find related papers by JEL classification:
  • A10 - General Economics and Teaching - - General Economics - - - General
  • B00 - Schools of Economic Thought and Methodology - - General - - - History of Economic Thought, Methodology, and Heterodox Approaches
  • D70 - Microeconomics - - Analysis of Collective Decision-Making - - - General

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