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Animal Spirits: Affective and Deliberative Processes in Economic Behavior


  • Loewenstein, George

    (Carnegie Mellon U)

  • O'Donoghue, Ted

    (Cornell U)


The economic conception of human behavior assumes that a person has a single set of well-defined goals, and that the person's behavior is chosen to best achieve those goals. We develop a model in which a person's behavior is the outcome of an interaction between two systems: a deliberative system that assesses options with a broad, goal-based perspective, and an affective system that encompasses emotions and motivational drives. Our model provides a framework for understanding many departures from full rationality discussed in the behavioral-economics literature, and captures the familiar feeling of being "of two minds." And by focusing on factors that moderate the relative influence of the two systems, our model also generates a variety of novel testable predictions.

Suggested Citation

  • Loewenstein, George & O'Donoghue, Ted, 2004. "Animal Spirits: Affective and Deliberative Processes in Economic Behavior," Working Papers 04-14, Cornell University, Center for Analytic Economics.
  • Handle: RePEc:ecl:corcae:04-14

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    This item is featured on the following reading lists, Wikipedia, or ReplicationWiki pages:
    1. アニマル・スピリット in Wikipedia Japanese
    2. Tinh thần động vật in Wikipedia Vietnamese
    3. Animal spirits (Keynes) in Wikipedia English
    4. Дух жизнерадостности in Wikipedia Russian
    5. Espíritus animales in Wikipedia Spanish
    6. Животински духови in Wikipedia Macedonian
    7. Espírito animal in Wikipedia Portuguese


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