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Behavioral Economics

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  • Berg, Nathan

Abstract

This article describes the emerging subfield known as behavioral economics, which borrows from psychology, empirically tests assumptions used elsewhere in economics, and provides theories that aim to be more realistic and closely tied to experimental and field data. Highlights from the experimental findings of behavioral economics are discussed. The article remarks critically on the role of empirical realism and continued use of as-if methodology in behavioral economics. Problems in normative behavioral economics are given special attention as debates arise concerning how to interpret empirical findings that contradict standard definitions of axiomatic rationality. Ecological rationality, methodological pluralism, and Simon's notion of bounded rationality are considered.

Suggested Citation

  • Berg, Nathan, 2010. "Behavioral Economics," MPRA Paper 26587, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:26587
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    References listed on IDEAS

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    Cited by:

    1. Judith Clifton & Daniel Díaz‐Fuentes & Marcos Fernández‐Gutiérrez & Julio Revuelta, 2011. "Is Market‐Oriented Reform Producing A ‘Two‐Track’ Europe? Evidence From Electricity And Telecommunications," Annals of Public and Cooperative Economics, Wiley Blackwell, vol. 82(4), pages 495-513, December.
    2. repec:jes:wpaper:y:2012:v:4:p:296-305 is not listed on IDEAS
    3. Berg, Nathan, 2014. "Success from satisficing and imitation: Entrepreneurs' location choice and implications of heuristics for local economic development," Journal of Business Research, Elsevier, vol. 67(8), pages 1700-1709.
    4. Flynn, Sean Masaki & Donnelly, Michael, 2012. "Does labor contract completeness drive unionization? Experimental evidence," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 41(4), pages 445-454.
    5. Lotz, Aïleen, 2011. "An Economic Approach to the Self : the Dual Agent," MPRA Paper 50771, University Library of Munich, Germany.
    6. Ashraf, Mohammad Ali & Alam, Mirza Mohammad Didarul & Alexa, Lidia, 2021. "Making decision with an alternative mind-set: Predicting entrepreneurial intention toward f-commerce in a cross-country context," Journal of Retailing and Consumer Services, Elsevier, vol. 60(C).
    7. Lotz, Aileen & Gosselin, Pierre, 2012. "A dynamic model of interactions between conscious and unconscious," MPRA Paper 36697, University Library of Munich, Germany.
    8. Basel, Jörn S. & Brühl, Rolf, 2013. "Rationality and dual process models of reasoning in managerial cognition and decision making," European Management Journal, Elsevier, vol. 31(6), pages 745-754.

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    More about this item

    Keywords

    bounded rationality; ecological rationality; Herbert Simon; as-if; survey;
    All these keywords.

    JEL classification:

    • D03 - Microeconomics - - General - - - Behavioral Microeconomics: Underlying Principles

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