Essays in behavioural economics

Abstract

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 increase explanatory and predictive power of economic theory. The study of behavioural economics has inspired a number of different theories and has been used in many applications, and this thesis follows the same path and investigates different applications of behavioural economics. This thesis explores three novel applications of behavioural economics to management, policy making and property investment decision making.