The Psychology of Economic Decisions

Volume One: Rationality and Well-Being

Edited by Isabelle Brocas and Juan D. Carrillo

Covers the topical and expanding field of behavioural economics
Will appeal to all those interested in the interface between economics and psychology
Theoretical and experimental contributions from senior economists and psychologists from both the UK and the US
Particular emphasis on policy implications

The Psychology of Economic Decisions

Volume One: Rationality and Well-Being

Edited by Isabelle Brocas and Juan D. Carrillo

Description

Psychologists and economists often ask similar questions about human behaviour. This volume brings together contributions from leaders in both disciplines.

The editorial introduction discusses methodological differences between the two which have until now limited the development of mutually beneficial lines of research. Psychologists have objected to what they see as an excessive formalism in economic modelling and an unrealistic degree of sophistication in the behaviour of individuals, while economists criticize the absence of a general psychological framework into which most results can be fitted and the lack of welfare implications in their theories. The editors encourage scholars to exploit the strengths of each discipline - the ability of psychologists to understand the feelings and motivation of individuals; and the experience of economists to develop normative frameworks.

The editors then highlight the links between the contributions by grouping them according to central themes in the study of rationality and well-being:

1. The causes and consequences of 'irrational behaviour';
2. The role of anticipatory feelings and imperfect self-knowledge on decision-making;
3. The way in which memory of past events and cost of thinking affect current decisions;
4. The interaction between anticipated and remembered utility and its effects on the welfare of individuals;
5. Experimental practice on how to perform controlled experiments to test hypotheses.

This exciting volume provides an excellent point of entry for anyone interested in the interface between economics and psychology.

The Psychology of Economic Decisions

Volume One: Rationality and Well-Being

Edited by Isabelle Brocas and Juan D. Carrillo

Introduction, Isabelle Brocas and Juan D. Carrillo
Part I: The Causes and Consequences of 'Irrational' Conducts
1:The Psychology of Irrationality: Why people make foolish, self-defeating choices, Roy F. Baumeister
2:Irrational Pursuit: Hyper-incentives from a visceral brain, Kent Berridge
3:The Pursuit and Assessment of Happiness May Be Self-Defeating, Jonathan W. Schooler, Daniel Ariely, and George Loewenstein
Part II: Imperfect Self-Knowledge and the Role of Information
4:Behavioral Policy, Andrew Caplin and John Leahy
5:Information and Self-Control, Isabelle Brocas and Juan D. Carrillo
6:Self-Signaling and Diagnostic Utility in Everyday Decision-Making, Ronit Bodner and Drazen Prelec
Part III: Imperfect Memory and Limited Capacity to Process Information
7:Mental Accounting and the Absentminded Driver, Itzhak Gilboa and Eva Gilboa-Schechtman
8:Self-Knowledge and Self-Regulation: An economic approach, Roland Benabou and Jean Tirole
9:A New Challenge for Economics: 'The frame problem', Xavier Gabaix and David Laibson
Part IV: Time and Utility
10:Experienced Utility and Objective Happiness: A moment-based approach, Daniel Kahneman
11:Making Sense: The causes of emotional evanescence, Timothy D. Wilson, Daniel Gilbert, and David B. Centerbar
12:Temporal Construal Theory of Time-Dependent Preferences, Yaacov Trope and Nira Liberman
Part V: Experimental Practices in Psychology, Economics, and Finance
13:Economists' and Psychologists' Experimental Practices: How they differ, why they differ, and how they could converge, Ralph Hertwig and Andreas Ortmann
14:Psychology and the Financial Markets: Applications to understanding and remedying irrational decision-making, Denis Hilton
15:What Causes Nominal Inertia? Insights from experimental economics, Ernst Fehr and Jean-Robert Tyran

The Psychology of Economic Decisions

Volume One: Rationality and Well-Being

Edited by Isabelle Brocas and Juan D. Carrillo

Author Information

Edited by Isabelle Brocas, Department of Economics, Columbia University; ECARES; CEPR, and Juan D. Carrillo, Graduate School of Business, Columbia University; CEPR

Contributors:

Daniel Ariely (MIT)
Roy F. Baumeister (Case Western Reserve University)
Roland Benabou (Princeton University)
Kent Berridge (University of Michigan)
Ronit Bodner (Director, Learning Innovations, Jerusalem)
Isabelle Brocas (ECARES; CEPR; University of Brussels)
Andrew Caplin (New York University)
Juan D. Carrillo (ECARES; CEPR; University of Brussels)
David B. Centerbar (University of Virginia)
Ernst Fehr (University of Zurich)
Xavier Gabaix (MIT)
Daniel Gilbert (Harvard University)
Itzhak Gilboa (Tel Aviv University)
Eva Gilboa-Schechtman (Bar-Ilan University)
Ralph Hertwig (Max Planck Institute for Human Development, Berlin)
Denis Hilton (University of Toulouse-II)
Daniel Kahneman (Princeton University)
John Leahy (Boston University)
David Laibson (Harvard University; NBER)
Nira Liberman (Indiana University)
George Loewenstein (Carnegie Mellon University)
Andreas Ortmann (Charles University and Academy of Sciences of the Czech Republic, Prague)
Drazen Prelec (MIT)
Jonathan W. Schooler (University of Pittsburgh)
Jean Tirole (IDEI and GREMAQ, Toulouse; CERAS, Paris; MIT)
Yaacov Trope (New York University)
Jean-Robert Tyran (University of St. Gallen, Switzerland)
Timothy D. Wilson (University of Virginia)