Top Research Papers on Behavioural Economics

The rise of behavioural approaches in economics has been one of most significant developments in the study of economic decision-making in recent years. The increasingly acknowledged failings of standard models of choice to explain economic decisions has prompted economists to incorporate into their analysis psychological insights into individual behaviour, such as social cognitive and emotional biases. This book introduces the topic of behavioural economics to a beginning readership, explaining its approach and methodology and assessing its successes and weaknesses. The book begins by tracing ...

Behavioural Economics’ milestones, Endowment Effect and Loss Aversion, have been recognized as ‘well documented,’ ‘robust,’ and ‘important’ even by the critics. But well documented, robust, and important what? Are these stylized facts, theoretical constructs, or psychological truths? Do they express genuine preferences or are they judgement mistakes? We discuss the problems with the nature of these claims in the lights of the goals of Behavioural Economics: to improve economics’ realisticness and to be considered mainstream. We argue that, under sensible interpretations of Loss Aversion and En...

The purpose of 'Behavioural education economics' is to understand the psychological factors influencing student performance and educational choices. One of the key insights of behavioural education economics is that educational decision making is characterised by choices which are usually not repeated and rely heavily on heuristics to solve complex choices in the absence of prior learning. At the heart of behavioural education economics is an understanding that academic outcomes are malleable. That investment decisions associated with education are primarily driven by non-cognitive behaviours ...

Part I: Background 1. Foundations: Psychology 2. Foundings: Neuroscience and Neuroeconomics 3. Behavioural Microeconomic Principles 4. Learning 5. Socially and Identity 6. Heuristics and Biases 7. Prospects and Regrets.

Human behaviour is an important determinant of health outcomes around the world. Understanding how people make health-related decisions is therefore essential for explaining health outcomes globally and for developing solutions to leading challenges in global health. Behavioural economics blends theories from economics and psychology to uncover key insights about human decision-making. This chapter describes several prominent theories from behavioural economics and reviews examples of how these theories can be useful in efforts to improve global health outcomes. We begin by reviewing the theor...

It’s the love child of economics and psychology – behavioural economics. It tries to explain people’s rational, or better irrational, behaviour when it comes to financial decision-making and consumption patterns. On Big Ideas, two experts outline the main lessons of behavioural economics and discuss the ways that it has affected policymaking in Australia. Could it be the key for better policies in the future?

This article examines the insights into how people actually behave from behavioural economics and how this affects economic explanation and prescription. It argues that implications for explanation are likely always to be contestable (because, as a new source of empirical evidence, behavioural economics encounters familiar problems with empiricism). The implications for prescription, however, are potentially significant, although not in the direction popularised by 'nudging'. Indeed, the behavioural insights suggest that public policy should be less concerned with forms of preference satisfact...

The COVID-19 lockdown has rapidly and radically changed academic life, disrupting the normal patterns of teaching and research that define the university. In this post, Adam Oliver reflects on how the lockdown led to him develop the behavioural economics on a post-it series and the particular challenges presented in reducing complex academic ideas to the contours of a single post-it.

The human behavior has already been concerned in economics for a long time,particularly after the 2002 Nobel economics distributed to behavioural economists,economics shows a signal to change direction to behavioural research,and behavioural research is becoming a hot topic in the economics field.Totally to say,the behavioural research of the economics follows a path from implicit backstage to frontstage.Beginning with amending assumption of economic man,behavioural research widen its fields gradually,and roots in behavioural economics;experimental economics and institutional economics.Therefo...

Traditional economic theory assumes that individuals are self-interested. They only care about their own well-being and disregard the impact of their actions on the others. However, the assumption of selfish individuals is unable to explain a number of important phenomena and puzzles. Individuals frequently engage in actions that are costly to themselves with no apparent reward. Behavioural economics provides plausible explanations for these actions. Individuals can be “boundedly rational" (Simon, 1955, and Kahneman et al. 1982) and/or can be driven by altruistic, equity and reciprocity consid...

Traditionally economists have based their economic predictions on the assumption that humans are super-rational creatures, using the information we are given efficiently and generally making selfish decisions that work well for us as individuals. Economists also assume that we're doing the very best we can possibly do - not only for today, but over our whole lifetimes too. But increasingly the study of behavioural economics is revealing that our lives are not that simple. Instead, our decisions are complicated by our own psychology. Each of us makes mistakes every day. We don't always know wha...

The purpose of the article. The article covers the mechanisms of behavioural economics introducing into the state policy of the country. This problem becomes especially relevant in modern conditions as people tend to make unreasonable economic decisions. The purpose of this paper is to research the irrational motives of individuals’ behaviour in making economic decisions and to determine the measures for introducing the mechanisms of behavioural economics in the state policy of Ukraine. Methodology. The survey is based on the analysis of the scientific papers of the following scientists in eco...

This survey of how behavioural economics has evolved over the past century and a quarter adopts a reflexive approach as it examines factors that have affected the uptake of different variants of behavioural economics. It begins with the behavioural dimension in Marshall’s work in 1890 and moves, via work in a similar spirit undertaken by members of the Oxford Economists’ Research Group, to the research programme of Herbert Simon and his colleagues, who created the behavioural theory of the firm. It considers how, despite Simon’s 1978 Nobel Prize, the behavioural theory of the firm did not get ...

: Behavioural economics offers an account of actual human behaviour. Contrasting with the conventional normative approach to rationality, rational choice theory, describes the deviations from optimal decision making. These are attributed to failures in two systems, one in charge of automatic behaviour (System 1) and the other responsible for reflective one (System 2). As important as this is, an elaboration of the interaction between them seems to be lacking. Philosophical pragmatism can contribute to address this want. It provides an evolutionary explanation of how people act accounting for t...

Why do we take risks or we do not? Why do not we recycle more? Under uncertainty what do we expect will happen to our home prices? These and many other questions are asked on daily basis.For possible explanations and answers to these and similar questions principles of behavioural economics can be used. Behavioural economics (BE) is the combination of psychology and economics that investigates what happens in markets in which some of agents display human limitations and complications (Mullainathan and Thaler, 2000). Behavioural economics provides more realistic psychological foundations to inc...

This thesis analyses decision making through the lens of behavioural economics. The three essays within consider variants of adverse selection problems and psychological biases which can manifest from imperfections in an information structure. The predominant psychological theory is informed by the idea of bounded awareness; one’s tendency to make suboptimal decisions through overlooking important information. The first essay concerns the winner’s curse in bargaining. The second essay assesses bidding behaviour in an auction environment. The third essay considers disclosure decisions. The gen...

Measuring National Happiness with Music and the Sunk Cost Effect: Evaluating the sunk cost effect and measuring national happiness with music.

The thesis consists of three stand-alone essays. Defaults are influential, cheap to change, and therefore of great interest to policymakers. However, it is still unclear what explains their influence. Optimal Defaults and Uncertainty presents a model in which uncertainty contributes to default inertia: decision makers may be content to stick with the default and avoid the costs of learning their optimal decision. The socially optimal default policy I find differs significantly from optimal policy in models where procrastination alone drives default inertia. I show that alternative policy measu...

Most of the economic literature takes preferences as given. Economists use them as the building blocks of their models, estimate them in lab experiments and correlate them with life outcomes. But we only rarely ask about their origins. How come that fundamental preferences such as risk aversion, reciprocity, inequality aversion and altruism vary so strongly across individuals? Are they biologically predetermined or can we shape them through upbringing and education? This dissertation aims to take a step towards answering these questions. Chapter two investigates whether the willingness to comp...

As a behavioural economist (an economist who brings psychological insights to bear on economic phenomena), preparing a controversy corner piece criticising experimental economics (the use of experimentation to address economic questions) is like working yourself up to enter the boxing ring against a friend. Experimental economics and behavioural economics have much in common. Both groups can trace their origins to psychology ± psychological theory in one case and experimentation in the other. Both sub®elds came of age in the last quarter of this century, and have gained growing acceptance with...