IDEAS home Printed from https://ideas.repec.org/p/bwu/schdps/sdp18005.html
   My bibliography  Save this paper

Revision or Revolution? A Note on Behavioral vs. Neoclassical Economics

Author

Listed:
  • Ronald Schettkat

Abstract

Behavioral economics, the analysis of economic decisions, has made enormous progress over the last decades and become accepted as a major field in economics. How is behavioral economics to be compared to the neoclassical model? As a revision of the neoclassical model enhancing the set of variables for motivation such as fairness in the utility function which is then to be maximized? Or is behavioral economics a revolution, a departure from the neoclassical axioms, a new model? This paper argues that many of the findings in behavioral economics are incompatible with the neoclassical model and have paved the way for a revolution in economics.

Suggested Citation

  • Ronald Schettkat, 2018. "Revision or Revolution? A Note on Behavioral vs. Neoclassical Economics," Schumpeter Discussion Papers sdp18005, Universitätsbibliothek Wuppertal, University Library.
    • Handle: RePEc:bwu:schdps:sdp18005
    as

    Download full text from publisher

    File URL: http://elpub.bib.uni-wuppertal.de/edocs/dokumente/fbb/wirtschaftswissenschaft/sdp/sdp18/sdp18005.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Neumark, David & Postlewaite, Andrew, 1998. "Relative income concerns and the rise in married women's employment," Journal of Public Economics, Elsevier, vol. 70(1), pages 157-183, October.
    2. Herbert A. Simon, 1955. "A Behavioral Model of Rational Choice," The Quarterly Journal of Economics, Oxford University Press, vol. 69(1), pages 99-118.
    3. 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.
    4. Thorstein Veblen, 1899. "Mr. Cummings's Strictures on "The Theory of the Leisure Class"," Journal of Political Economy, University of Chicago Press, vol. 8, pages 106-106.
    5. Paul De Grauwe, 2014. "Booms and Busts in Economic Activity: A Behavioral Explanation," World Scientific Book Chapters, in: Exchange Rates and Global Financial Policies, chapter 19, pages 521-556, World Scientific Publishing Co. Pte. Ltd..
    6. Easterlin, Richard A, 2001. "Income and Happiness: Towards an Unified Theory," Economic Journal, Royal Economic Society, vol. 111(473), pages 465-484, July.
    7. Kahneman, Daniel & Tversky, Amos, 1979. "Prospect Theory: An Analysis of Decision under Risk," Econometrica, Econometric Society, vol. 47(2), pages 263-291, March.
    8. Wong, Stanley, 1973. "The "F-Twist" and the Methodology of Paul Samuelson," American Economic Review, American Economic Association, vol. 63(3), pages 312-325, June.
    9. Akerlof, George A & Yellen, Janet L, 1987. "Rational Models of Irrational Behavior," American Economic Review, American Economic Association, vol. 77(2), pages 137-142, May.
    10. Daniel Kahneman & Jack L. Knetsch & Richard H. Thaler, 1991. "Anomalies: The Endowment Effect, Loss Aversion, and Status Quo Bias," Journal of Economic Perspectives, American Economic Association, vol. 5(1), pages 193-206, Winter.
    11. Becker, Gary S & Murphy, Kevin M, 1988. "A Theory of Rational Addiction," Journal of Political Economy, University of Chicago Press, vol. 96(4), pages 675-700, August.
    12. N. Gregory Mankiw & David Romer & David N. Weil, 1992. "A Contribution to the Empirics of Economic Growth," The Quarterly Journal of Economics, Oxford University Press, vol. 107(2), pages 407-437.
    13. Nathan Berg & Gerd Gigerenzer, 2010. "As-if behavioral economics: neoclassical economics in disguise?," History of Economic Ideas, Fabrizio Serra Editore, Pisa - Roma, vol. 18(1), pages 133-166.
    14. George A. Akerlof, 2007. "The Missing Motivation in Macroeconomics," American Economic Review, American Economic Association, vol. 97(1), pages 5-36, March.
    15. Paul Grauwe, 2011. "Animal spirits and monetary policy," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 47(2), pages 423-457, June.
    16. Daniel Kahneman & Richard H. Thaler, 2006. "Anomalies: Utility Maximization and Experienced Utility," Journal of Economic Perspectives, American Economic Association, vol. 20(1), pages 221-234, Winter.
    17. George A. Akerlof & Rachel E. Kranton, 2011. "Identity Economics: How Our Identities Shape Our Work, Wages, and Well-Being," Economics Books, Princeton University Press, edition 1, number 9108.
    18. Feduzi, Alberto, 2007. "On the relationship between Keynes's conception of evidential weight and the Ellsberg paradox," Journal of Economic Psychology, Elsevier, vol. 28(5), pages 545-565, October.
    19. Ronald SCHETTKAT, 2010. "Will only an earthquake shake up economics?," International Labour Review, International Labour Organization, vol. 149(2), pages 185-207, June.
    20. Veblen, Thorstein, 1899. "The Theory of the Leisure Class," History of Economic Thought Books, McMaster University Archive for the History of Economic Thought, number veblen1899.
    21. Solow, Robert M., 1979. "Another possible source of wage stickiness," Journal of Macroeconomics, Elsevier, vol. 1(1), pages 79-82.
    22. Daniel Ellsberg, 1961. "Risk, Ambiguity, and the Savage Axioms," The Quarterly Journal of Economics, Oxford University Press, vol. 75(4), pages 643-669.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. George Tridimas, 2020. "Modelling the Quest for Status in Ancient Greece: Paying for Liturgies," Homo Oeconomicus: Journal of Behavioral and Institutional Economics, Springer, vol. 37(3), pages 213-236, December.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Ronald Schettkat, 2018. "The Behavioral Economics of John Maynard Keynes," Schumpeter Discussion Papers sdp18007, Universitätsbibliothek Wuppertal, University Library.
    2. Ronald Schettkat, 2018. "Animal Spirits - Die Verhaltensökonomischen Grundlagen der Keynesschen Theorie," Schumpeter Discussion Papers sdp18008, Universitätsbibliothek Wuppertal, University Library.
    3. Dohmen, Thomas, 2014. "Behavioral labor economics: Advances and future directions," Labour Economics, Elsevier, vol. 30(C), pages 71-85.
    4. Ronald Schettkat, 2020. "Micro-Foundations of Diverging Economic Policies: Keynesian, Behavioural, Neoclassic," Intereconomics: Review of European Economic Policy, Springer;ZBW - Leibniz Information Centre for Economics;Centre for European Policy Studies (CEPS), vol. 55(2), pages 105-111, March.
    5. Schilirò, Daniele, 2012. "Bounded rationality: psychology, economics and the financial crisis," MPRA Paper 40280, University Library of Munich, Germany.
    6. Daniel Kahneman, 2003. "A Psychological Perspective on Economics," American Economic Review, American Economic Association, vol. 93(2), pages 162-168, May.
    7. Botond Kőszegi & Matthew Rabin, 2006. "A Model of Reference-Dependent Preferences," The Quarterly Journal of Economics, Oxford University Press, vol. 121(4), pages 1133-1165.
    8. Eduard Marinov, 2017. "The 2017 Nobel Prize in Economics," Economic Thought journal, Bulgarian Academy of Sciences - Economic Research Institute, issue 6, pages 117-159.
    9. Muhammad Faress Bhuiyan, 2018. "Life Satisfaction and Economic Position Relative to Neighbors: Perceptions Versus Reality," Journal of Happiness Studies, Springer, vol. 19(7), pages 1935-1964, October.
    10. Committee, Nobel Prize, 2017. "Richard H. Thaler: Integrating Economics with Psychology," Nobel Prize in Economics documents 2017-1, Nobel Prize Committee.
    11. Vincze, János, 2018. "Szubsztantív vagy ökológiai racionalitás?. A pénzillúzió esete [Substantive or ecological rationality?. A case of the money illusion]," Közgazdasági Szemle (Economic Review - monthly of the Hungarian Academy of Sciences), Közgazdasági Szemle Alapítvány (Economic Review Foundation), vol. 0(11), pages 1097-1114.
    12. Benno Torgler & Markus Schaffner & Bruno S. Frey & Sascha L. Schmidt & Uwe Dulleck, 2008. "Inequality Aversion and Performance in and on the Field," NCER Working Paper Series 36, National Centre for Econometric Research.
    13. Metcalfe, Robert & Dolan, Paul, 2012. "Behavioural economics and its implications for transport," Journal of Transport Geography, Elsevier, vol. 24(C), pages 503-511.
    14. Benno Torgler & Sascha L. Schmidt & Bruno S. Frey, 2006. "The Power of Positional Concerns: A Panel Analysis," CREMA Working Paper Series 2006-19, Center for Research in Economics, Management and the Arts (CREMA).
    15. Justina A.V. Fischer & Benno Torgler, 2007. "Social capital and relative income concerns: evidence from 26 countries," University of St. Gallen Department of Economics working paper series 2007 2007-05, Department of Economics, University of St. Gallen.
    16. Edwards, José, 2017. "Journal of the History of Economic Thought preprints - Harry Helson’s Adaptation-Level Theory, Happiness Treadmills, and Behavioral Economics," SocArXiv 6cvbh, Center for Open Science.
    17. Benno Torgler & Sascha L. Schmidt & Bruno S. Frey, 2008. "The Power of Positional Concerns," IEW - Working Papers 368, Institute for Empirical Research in Economics - University of Zurich.
    18. Bogliacino, Francesco & Codagnone, Cristiano, 2017. "Microfoundations, Behaviour, and Evolution: Evidence from Experiments," MPRA Paper 82479, University Library of Munich, Germany.
    19. Benno Torgler & Sascha L. Schmidt & Bruno S. Frey, 2006. "Relative Income Position and Performance: An Empirical Panel Analysis," CREMA Working Paper Series 2006-03, Center for Research in Economics, Management and the Arts (CREMA).
    20. Benno Torgler & Justina A.V. Fischer, 2006. "Does Envy Destroy Social Fundamentals? The Impact of Relative Income Position on Social Capital," Working Papers 2006.38, Fondazione Eni Enrico Mattei.

    More about this item

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bwu:schdps:sdp18005. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Frank Hoffmann). General contact details of provider: http://elpub.bib.uni-wuppertal.de .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.