Top Research Papers on Behavioural Economics

Behavioral economics offers an account of actual human behavior. 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 behavior (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 the co...

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...

Mainstream economics postulates the existence of an economic man endowed with rational and self-interested behaviour. The aim of this article is to analyze the relevance of this attributes, since the economic behaviour is, both, a form of human action and the object of the study of economics. Moreover, we go further with some particular objectives and examine the role of behavioural economics and the way in which it relates to the traditional model. The current events on the world stage have generated heated debates in the academic world with respect to the adequacy of the analysis of the econ...

Innovation, entrepreneurship, knowledge, and human capital are widely acknowledged as key levers of development. Yet what are the sources of these factors, and why do they differ in their endowment across regions? Motivated by a belief that theories of economic development can move beyond the generally accepted explanations of location and the organization of industries and capital, this book establishes a behavioural theory of economic development illustrating that differences in human behaviour across cities and regions are a significant deep-rooted cause of uneven development. Fusing a rang...

This chapter analyses the motivations of economic actors in classical Athens from the point of view of modern behavioural economics. The (now) old orthodoxy of M.I. Finley, drawing on Bücher and Weber, stressed that the so‐ called homo economicus did not exist until recent times: in antiquity, an anti‐productive mentality was essentially hard‐wired into the minds of elite Greeks and Romans, preventing economic development. This approach has been widely rejected in recent years, and in particular the methods of New Institutional Economics (NIE) have provided a way around the moribund formalist‐...

Draft of a contribution to Kincaid & Ross Modern Guide to Philosophy of Economics (Elgar). To talk in 2020 about the foundations of behavioural and experimental economics (BE and EE from here on), or for that matter the methodological and substantive relationships between economic and psychological models of behaviour (Ortmann & Gigerenzer 1997), and the implications of differences in experimental methods (Hertwig & Ortmann 2001) requires that we first talk about the ramifications of the replicability- and credibility crisis that has afflicted the business and social sciences, and very prom...

Since its inception in the late 1970s, behavioural economics has gone from being an outlier to a widely recognized yet still contested subset of the economic sciences. One of the basic arguments in behavioural economics is that a more realistic psychology ought to inform economic theories. While the history of behavioural economics is often portrayed and articulated as spanning no more than a few decades, the practice of utilizing ideas from psychology to rethink theories of economics is over a century old. In the first three decades of the 20th century, several mostly American economists made...

Abstract The article presents the current state of evolutionary economics against the backdrop of changes related to the potential use of the achievements of other social sciences, in particular psychology, as well as dynamically developing neuroscience. The article suggests a synthesis of evolutionary and behavioural economics concepts as a logical consequence of evolutionary cooperation processes in social sciences. Interdisciplinary initiatives create new perspectives on generation synergy effects for all participants. Contemporary evolutionary economists present the nature of ongoing innov...

The ability of consumers to make informed financial decisions improves their ability to develop sound personal finance. This paper uses a panel data set from Russia, an economy in which household debt has grown at an astounding rate, to examine the importance of financial literacy and its effects on behavior. The paper studies both the financial and real consequences of financial illiteracy. Even though consumer borrowing increased very rapidly in Russia, only 41% of respondents demonstrate an understanding of interest compounding and only 46% can answer a simple question about inflation. Fina...

In the conditions of national and global transformations, which are taking place under the influence of factors of political and economic instability, one of the most important problems of the functioning and development of enterprises is ensuring their competitiveness. At the current stage of development of the world economy, which is characterized by high levels of instability and randomness of the course of economic processes, an urgent task of the management of economic entities is the study of their market behaviour, taking into account the existing and latent connections with both intern...

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 ...

Weber’s very important theory on the influence of religion on economic behaviour was tested in the societies which belong to different cultural and religious circles. However, due to various socio-political circumstances, the testing of Weber’s theoretical-methodological framework has been largely neglected in the countries where Orthodox Christianity is dominant. However, the difficulties that arose in Orthodox societies during the post-socialist transformation, as well as the shift from the economic research paradigm to the cultural one on the global level, along with the revival of religion...

This study aims to systematically reveal the application of behavioural economics theories in information-seeking behaviour research to promote the theoretical development of information-seeking behaviour research. A systematic review method was utilised to collect 92 relevant articles published from 1989 to 2022. The temporal development of these articles, research themes, and the theoretical contributions of behavioural economics theories to information-seeking behaviour research were organised and analysed. The findings are as follows: First, behavioural economics theories have been applied...

The pooled relative risk estimates of adverse health outcomes consistently shown to be associated with excessive sedentary behaviour were gathered from meta-analyses of prospective cohort studies and the prevalence of excessive Sedentary behaviour in Canadian men and women was obtained.

Economists and political scientists have long debated the relations between economic inequality and corruption at the societal level. Extending this literature, we proposed and tested that economic inequality breeds the corrupt behaviour of individuals. Analyses of 45-year archival data from the United States found that official corruption crimes were more prevalent in years and states with greater economic inequality. Three subsequent experiments (N = 776) using economic games showed that individuals exposed to greater economic inequality exhibited more corrupt behaviour in both Chinese and A...

Empirical research shows the existence of a relationship between the electoral behaviour of citizens and their economic condition. The economic voting theory explains that in periods of economic growth citizens-voters reward the government considered the author of their well-being; on the contrary, in times of crisis, the population punishes it. The peculiarity of these studies, based on the analysis of secondary data designed for other primary purposes, is to have national territorial dimension, where the percentage of votes collected by government/opposition parties in political national ele...

Tourists display bounded rationality when they rely on heuristics to simplify complex decisions or make decisions not based purely on self-interest. Behavioural economics, which moves beyond the widely criticised assumptions that traditional economics makes regarding rational economic behaviour, provides useful theoretical foundations and approaches to tourism and hospitality studies. This paper reviews and discusses studies that evaluate bounded rational behaviour in the tourism and hospitality industry and examine influencing psychological factors. A review framework of economic behaviour is...

It is substantiated in the article that behavioural economics makes it possible one to move away from the idealized perception of a person as a completely rational decision-making subject who possesses all the information about the object; is able to form a clear hierarchy of own priorities, which is determined by the balance between benefits and costs; stable in his preferences and not susceptible to emotional influences. For this, it is necessary to take into account cognitive biases, systematic errors of thinking and the possibilities of their avoidance, which is actually what behavioural e...

Abstract ‘Behavioural economics’, or the application of methods and evidence from other social sciences to economics, has increased greatly in significance and use in the last two decades. In this paper, we discuss the basic elements of behavioural economics. We then assess the applications of behavioural economics to the analysis of tax compliance. Our central conclusion is that many, perhaps most, of the recent insights on what motivates tax compliance have flowed directly from behavioural economics. We conclude with suggestions on – and predictions of – directions in which future applicatio...

The present turning point, accentuated by the crisis, has revitalized the interdisciplinary study of economics and determined the reconsideration of its fundamental bases as a social science. The economists have abandoned the traditional neoclassical sphere and have directed towards understanding the behaviour resorting to psychology and developing in this manner a new field - behavioural economics. This article examines whether this economic sub-discipline is a viable research direction and the extent to which it may increase the explanatory power of science by providing a realistic database ...

Behavioural economics draws upon fieldwork, experiments and research in disciplines such as psychology for building blocks to construct economic analysis that is more descriptively realistic and both augments and qualifies traditional economics as a tool for designing policy. Though behavioural economics has attracted much attention and respectability in the past decade or so, its roots date back to work undertaken in Europe a century ago and in the US in the middle of the twentieth century. Whereas economists traditionally have seen choice as an optimising activity subject to given preference...

In the late 40-ies of XX c., Claude Shannon developed the formula for the information unit, the bit. Since then, the problem concerning the informative essence of the economic processes and the phenomena in general initiated a new direction in science. However, the information theory has still remained undeveloped. The current article makes a modest attempt to make clarifications about the said theoretical direction.

Behavioural law and economics applies the conceptual tools of behavioural economics to the analysis of legal problems and legal intervention. These models, and the experiments to test them, assume an institution-free state of nature. In modern societies, the law’s subjects never see this state of nature. However, a rich arrangement of informal and formal institutions creates generalised trust. If individuals are sufficiently confident that nothing too detrimental will happen, they are freed up to interact with strangers as if they were in a state of nature. This willingness dramatically reduce...

The results of the study indicate that economic, digital, and entrepre­neurial literacy can have impact to economic behaviour of students and also noted that economic and digital literacy had been confirmed as essential to predict economic behaviour in terms of consumptive and productive activities.

ABSTRACT Behavioural economics has taught us that human agents don't always display consistent, context-independent and stable preferences in their choice behaviour. Can we nevertheless do welfare economics in a way that lives up to the anti-paternalist ideal most economists subscribe to? I here discuss Sugden's powerful critique of most previous attempts at doing so, which he dubs the ‘New Consensus’, as appealing to problematic notions of latent preference and inner rational agency. I elaborate on a fundamental rethinking of the normative foundations of anti-paternalist welfare measurement t...

Data from economic games are used to directly compare these components across species and contexts, as well as in relation to more naturalistic behaviours, to better understand the evolution of economic behaviour and the social and ecological contexts that influenced it.

This article summarises the theoretical foundations, main approaches and current trends in the field of behavioural normative economics. It identifies bounded rationality and bounded willpower as the two core concepts that have motivated the field. Since the concepts allow for individual preferences to be context‐dependent and time‐inconsistent, they pose an intricate problem for standard welfare analysis. The article discusses the ways in which two prominent approaches – the preference purification approach and the opportunity approach – have tackled the problem. It argues that shortcomings i...

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...

The COVID-19 pandemic hit many countries at a time when their education systems were facing multiple challenges. Economic, public-health and social impacts from the pandemic have exacerbated many of these challenges. The aim of this paper is to explore the way in which the behavioural sciences can help support the policy response to the COVID-induced education crisis, and to serve as a learning experience for other future crises. The paper involves an empirical exploration of the factors associated with a range of outcomes using large nationally representative datasets, and interpreting these ...

This paper examines the role of uncertainty due to infectious diseases in predicting twenty International airline stocks within a nonparametric causality-in-quantiles framework. We observe that: First, the BDS test shows that nonlinearity is very important when examining the causal relationship between EMV-ID and airline stock returns and its volatility. Second, the nonparametric quantiles-based causality test shows that airline stocks predictability driven by pandemic-based uncertainty is stronger mostly around the lower quantiles, with weak evidences in middle and higher quantiles. Relevant ...

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

Abstract: Contemporary behavioural economics has documented common failures of reasoning that apparently make possible policies that benefit individuals by contravening or correcting their judgements. These policies appear to be paternalistic, even though a traditional view would deny that they are paternalistic on the grounds that policies such as nudges do not restrict individual liberty. It appears to many that a new definition of paternalism that takes its cue from behavioural economics is needed. Furthermore, if one revises the definition of paternalism, one must revisit traditional views...

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 growing popularity of behavioural economics is also reflected in feminist behavioural economics. The contribute presents some of its postulates and constructs. In the critique of standard economic theory based on the assumption of entirely rational action, the feminine view is to bring new insights and applications. The main goal is in addition to the introduction of feminist behavioural economics to try to answer the question whether these alternative approaches can be an inspiration in the search for adequate economics for the 21st century? Even in the behavioural sphere, feminist econom...

The study of reciprocity has attracted a lot of interest among behavioural economists, at the levels of both theoretical modelling and experimental testing. This chapter reviews briefly the main theories that have been proposed, and their consideration of intentions versus outcomes as drivers of reciprocity. However, most of the chapter reviews the economic games that behavioural economists have used to test reciprocal actions, including the ultimatum, dictator, centipede, trust and public goods games. These games demonstrate again that the extent to which reciprocity is observed and sustained...

A systematic literature review protocol is developed focusing on the primary question: “Which behavioural economics mechanisms influence fisher behaviour?” the aim is to provide a comprehensive overview of these different mechanisms and how they have been applied in the study of fisher behaviour.

Positive answers and promising perspectives are brought about to support the existence and prevalence of economic behaviours among non-human primates.

PurposeWhile existing research confirms that hazardous locations increase fear and decrease entrepreneurial intentions, there is only limited knowledge on why and how business managers decide to invest in flood-prone areas to create economic benefits. The purpose of this paper is to employ location and protection motivation theories as complementary lenses for this investigation.Design/methodology/approachData were purposively collected from ten businesses. Then, using MAXQDA 2018 software programme for qualitative data, a systematic content analysis was carried out to draw empirical insights ...

Changes in the economy have influenced many areas of the life of the consumer. It also determines the behavior of consumers consumer-related to product consumption and purchasing. Consumers have reported different modifications in behavior related to their shopping behavior, particularly in the last few years, when the economic situation has undergone remarkable changes worldwide. As a recession time, consumers change their buying behavior and decrease or limit their purchasing due to financial issues. They focus on particular products that they find essential for survival. Due to the adverse ...

ABSTRACT Behavioural economics promises to bring economics closer to being evidence based. However, its ability to do this may depend on a methodological issue: whether the findings of behavioural economics are used to modify or extend standard theory, or to contribute towards replacing it where required – respectively the incremental and selective replacement strategies. I focus on the incremental approach, in terms of its implied causal mechanism. Two stages are involved, corresponding to the prediction of standard theory and to a separate component that aligns it with actual observations. I...

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 ...

This chapter reviews a number of frequently-used computational intelligence tools in the realm of computational economics, including K nearest neighbors, K means, self-organizing maps, reinforcement learning, decision trees, evolutionary computation, swarm intelligence, and “random” behavior to see how the heuristics employed in the latter can lay a computational foundation of theHeuristics studied by the former.

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...

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...

Over several decades there have been major changes to the way public economists investigate behavioural responses to taxation. This includes areas such as the supply of labour, charitable giving, savings, capital gains realisations, mobility, bequests, family structure, reported income and tax evasion. Recent research has utilised new data sets and applied new empirical methods, including laboratory experiments, natural field experiments and controlled field experiments. Other disciplines, especially psychology, are increasingly contributing to the application of behavioural (or cognitive) eco...

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...

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.

to the Volume.- I: Economic Factors and Individual Satisfaction.- National Wealth and Individual Happiness.- Beliefs about Attainment of Life Satisfaction as Determinants of Preferences for Everyday Activities.- Need for Achievement and Entrepreneurial Activity in Small Firms.- The Kibbutz and Private Property.- II: Inflation, Unemployment, and Taxation.- Perceptions of Inflation.- Cross-Sectional Evidence on the Rationality of the Mean and Variance of Inflation Expectations.- The Perceived Causal Structure of Unemployment.- A Cross-National Comparison of Attitudes, Personality, Behaviour, and...

Studies on energy conservation and household behaviour were predominantly based on econometrics using secondary data with limited studies employing the primary data. In addition, the use of secondary data from developing countries are not without their inadequacies due to missing data points. However, generating data may lead to over or under estimations which led to this study deploying structural equation model and making use of cross-sectional data from a developing country perspective. Data were collected through a structured questionnaire from 329 respondents in Akure Metropolis household...

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?