In recent years, several authors have reconstructed the relationship between 20th-century economic theory and neuro-psychological research in terms of a three-stage narrative of initial unity, increasing separation, and ongoing reunification. In this article, I draw on major developments in economic theory and neuro-psychological research to provide a descriptive and normative critique of this reconstruction. Moreover, I put forward a reconstruction of the relationship between economics and neuro-psychology that, I claim, better fits both the available empirical evidence and (...) the methodological foundations of these disciplines. In doing so, I argue that recent calls to develop a unified interdisciplinary framework for modeling choice are premised on disputable presuppositions concerning both the domain of economic theory and the relationship between this theory’s axiomatic foundations and empirical findings about the neuro-psychological substrates of choice. (shrink)

From childhood through to adulthood, retirement and finally death, _The Economic Psychology of Everyday Life_ uniquely explores the economic problems all individuals have to solve across the course of their lives. Webley, Burgoyne, Lea and Young begin by introducing the concept of economic behaviour and its study. They then examine the main economic issues faced at each life stage, including: * the impact of advertising on children * buying a first house and setting up home (...) * changing family roles and gender-linked inequality * redundancy and unemployment * coping on a pension * obituaries, wills and inheritance. Finally they draw together the commonalties of economic problems across the lifespan, discuss generational and cultural changes in economic behaviour, and examine the significance of other, non-economic constraints, upon individuals. _The Economic Psychology of Everyday Life_ provides a much-needed comprehensive and accessible guide to economic psychology which will be of great interest to researchers and students. (shrink)

(2001). Two unconventional approaches to the future of economics: Ecological economics and economic psychology. World Futures: Vol. 56, Values, Ethics and Econmics, Part II, pp. 351-367.

This book argues for evolutionary epistemology and distinguishing functionality from physicality in the social sciences. It explores the implications for this approach to understanding in biology, economics, psychology and political science. Presenting a comprehensive overview of philosophical topics in the social sciences, the book emphasizes how all human cognition and behavior is characterized by functionality and complexity, and thus cannot be explained by the point predictions and exact laws found in the physical sciences. Realms of functional complexity – such (...) as the market order in economics, the social rules of conduct, and the human CNS – require a focus on explanations of the principles involved rather than predicting exact outcomes. This requires study of the historical context to understand behavior and cognition. This approach notes that functional complexity is central to classical liberal ideas such as division of labour and knowledge, and how this is a far more powerful and adequate account of social organization than central planning. Through comparison of these approaches, as well as its interdisciplinary scope, this book will interest both academics and students in philosophy, biology, economics, psychology and all other social sciences. (shrink)

The rise of behavioral economics since the 1980s led to richer mutual influence between economic and psychological theory and experimentation. However, as behavioral economics has become increasingly integrated into the main stream in economics, and as psychology has remained damagingly methodologically conservative, this convergence has recently gone into reverse. At the same time, growing appreciation among economists of the limitations of atomistic individualism, along with advantages in econometric modeling flexibility by comparison with psychometrics, is leading economists to become (...) more pluralistic than psychologists about the ontology of behavioral causation and structures. This, combined with economists’ growing interest in network models, is drawing economists closer in theory and practice to sociologists who use quantitative or mixed methods. (shrink)

This article argues that the (epi)genetic, cultural, symbolic, and environmental transmission channels are insufficient to explain the structure of modern human societies. Economic exchange of knowledge embodied in goods and services constitutes an additional transmission channel that makes more efficient use of limited human cognitive capacity. Economic exchange results in a gradual shift in societies from task-based division of labor to cognitive specialization. This shifts scarce cognitive resources away from production and into learning. It accelerates learning and reinforces (...) the drive towards specialization. Cognitive specialization may constitute another “major transition” towards a higher level of aggregation in human societies, with properties that differ from symbolic transmission. Collective control of individual market-based exchange is ensured by means of economic institutions that put a constraint on individual behavior. (shrink)

Economics and psychology are both sciences of human behaviour. This paper gives a survey of their interaction. First, the changing relationship between the two sciences is discussed: while economics was once imperialistic, it has become a science inspired by psychological insights. In order to illustrate this, recent developments and evidence for three major areas are presented: bounded rationality, non-selfish behaviour, and the economics of happiness.

The integration of economics and psychology has created a vibrant and fruitful emerging field of study. The essays in Economics and Psychology take a broad view of the interface between these two disciplines, going beyond the usual focus on "behavioral economics." As documented in this volume, the influence of psychology on economics has been responsible for a view of human behavior that calls into question the assumption of complete rationality, the acceptance of experiments as a valid method (...) of economic research, and the idea that utility or well-being can be measured.The contributors, all leading researchers in the field, offer state-of-the-art discussions of such topics as pro-social behavior and the role of conditional cooperation and trust, happiness research as an empirical tool, the potential of neuroeconomics as a way to deepen understanding of individual decision making, and procedural utility as a concept that captures the well-being people derive directly from the processes and conditions leading to outcomes. Taken together, the essays in Economics and Psychology offer an assessment of where this new interdisciplinary field stands and what directions are most promising for future research, providing a useful guide for economists, psychologists, and social scientists. (shrink)

That the rationality of individual people is ‘bounded’ – that is, finite in scope and representational reach, and constrained by the opportunity cost of time – cannot reasonably be controversial as an empirical matter. In this context, the paper addresses the question as to why, if economics is an empirical science, economists introduce bounds on the rationality of agents in their models only grudgingly and partially. The answer defended in the paper is that most economists are interested primarily in markets (...) and only secondarily in the dynamics of individual decisions – specifically, they are interested in these dynamics mainly insofar as they might systematically influence the most useful approaches to modeling interesting markets. In market contexts, bounds on rationality are typically generated by institutional and informational properties specific to the market in question, which arise and are sustained by structural dynamics that do not originate in or reduce to individuals' decisions or psychologic.. (shrink)

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. (shrink)

Psychologists have a long tradition of studying human behavior, strengths and weaknesses, biases and limitations. Economists have constructed normative frameworks that capture the most important elements of human decision-making and developed powerful tools to determine individual and strategic choices in a variety of situations. Only recently have their strengths been combined and economic models enriched with key ingredients found in psychological studies.This volume covers four of the most important themes in this interdisciplinary field: feelings, inconsistencies, limitations and biases. Each (...) chapter contributes to a more comprehensive and accurate modelling and description of human behavior. Its four parts cover: the origins, formation, and evolution of beliefs; consistency, commitment, and intertemporal separability of dynamic choices; attention, preference formation, and risk evaluation in limited cognition; and affective behaviour, specifically the role of emotions in decision making. (shrink)

Psychologists have a long tradition of studying human behavior, strengths and weaknesses, biases and limitations. Economists have constructed normative frameworks that capture the most important elements of human decision-making and developed powerful tools to determine individual and strategic choices in a variety of situations. Only recently have their strengths been combined and economic models enriched with key ingredients found in psychological studies.This volume covers four of the most important themes in this interdisciplinary field: feelings, inconsistencies, limitations and biases. Each (...) chapter contributes to a more comprehensive and accurate modelling and description of human behavior. Its four parts cover: the origins, formation, and evolution of beliefs; consistency, commitment, and intertemporal separability of dynamic choices; attention, preference formation, and risk evaluation in limited cognition; and affective behaviour, specifically the role of emotions in decision making. (shrink)

Financial and prosocial biases in favor of attractive adults have been documented in the labor market, in social transactions in everyday life, and in studies involving experimental economic games. According to the taste-based discrimination model developed by economists, attractiveness-related financial and prosocial biases are the result of preferences or prejudices similar to those displayed toward members of a particular sex, racial, ethnic, or religious group. Other explanations proposed by economists and social psychologists maintain that attractiveness is a marker of (...) personality, intelligence, trustworthiness, professional competence, or productivity. Evolutionary psychologists have argued that attractive adults are favored because they are preferred sexual partners. Evidence that stereotypes about attractive people are causally related to financial or prosocial biases toward them is weak or nonexistent. Consistent with evolutionary explanations, biases in favor of attractive women appear to be more consistent or stronger than those in favor of attractive men, and biases are more consistently reported in interactions between opposite-sex than same-sex individuals. Evolutionary explanations also account for increased prosocial behavior in situations in which attractive individuals are simply bystanders. Finally, evolutionary explanations are consistent with the psychological, physiological, and behavioral changes that occur when individuals are exposed to potential mates, which facilitate the expression of courtship behavior and increase the probability of occurrence of mating. Therefore, multiple lines of evidence suggest that mating motives play a more important role in driving financial and prosocial biases toward attractive adults than previously recognized. (shrink)

The aim of this work is to illustrate the psychological contributions of Pragmatism and of the Original Institutional Economics (also referred to as OIE or institutionalism), and their relevance for improving the process of social valuing and, as a consequence, the effectiveness of policy action. As a matter of fact, both institutionalist and pragmatist theories were well acquainted with various strands of psychology, and some of them also provided relevant contributions in this respect. Moreover, these theories reveal, along with (...) various differences, significant complementarities, both between themselves and with important concepts of social psychology and psychoanalysis. The work will address the following aspects: (I) The main characteristics of pragmatist psychology with particular attention to their social implications. For space reasons, we will focus attention on the contributions of authors – John Dewey, William James and George Herbert Mead – more oriented to social sciences. (II) The psychological contributions of institutionalism. We will pay particular attention to Thorstein Veblen's theory of instincts and John Rogers Commons' theory of negotiational psychology. We highlight that these theories present, despite a number of differences, relevant complementarities. (shrink)

We investigated the relation between economic and social attitudes and the psychological underpinnings of these attitudes in candidates (N = 9515) in the Finnish 2017 municipal elections. In this politically elite sample, right-wing economic attitudes and social conservatism were positively correlated (r =.41), and this correlation was predominantly driven by those on the economic left being socially liberal, and vice versa. In terms of underlying psychological processes, consistent with dual process models of political ideology, the anti-egalitarian aspect (...) of social dominance orientation was more strongly associated with right-wing economic attitudes, and the conventionalism and aggression aspects of right-wing authoritarianism with social conservatism. Our results show that even in a non-US context in which the masses organize their political attitudes on two independent dimensions, these dimensions are moderately aligned among certain parts of the political elite, and that the political attitudes of the political elite can be traced to underlying psychological motivations. We argue that equality concerns could play a role in explaining why the left-right and liberal-conservative dimensions are more strongly aligned among those on the left and those more liberal. (shrink)

Hertwig and Ortmann suggest methodological practices from economics (script enactment, repeated measures, performance based payments, and absence of deception) for psychology. Such prescriptive methodologies may be unrepresentative of real world behaviors because people are not: always behaving with complete information, monetarily rewarded for important activities, repeating tasks to perfection, aware of all contributing variables. These proscriptions, while useful in economics, may obfuscate important psychological phenomena.

Recent arguments claim that behavioral science has focused – to its detriment – on the individual over the system when construing behavioral interventions. In this commentary, we argue that tackling economic inequality using both framings in tandem is invaluable. By studying individuals who have overcome inequality, “positive deviants,” and the system limitations they navigate, we offer potentially greater policy solutions.

Introduction George Loewenstein, Daniel Read, and Roy F. Baumeister P _L sychology and economics have a classic love-hate relationship. ...

First Published in 1999. Routledge is an imprint of Taylor & Francis, an informa company.

Shortcomings in the target article preclude adequate tests of developmental/attachment and strategic pluralism theories. Methodological problems include comparing college student attitudes with societal level indicators that may not reflect life conditions of college students. We show, through two principal components analyses, that multiple tests of the theories reduce to only two findings that cannot be interpreted as solid support for evolutionary hypotheses.

The domain of “folk-economics” consists in explicit beliefs about the economy held by laypeople, untrained in economics, about such topics as, for example, the causes of the wealth of nations, the benefits or drawbacks of markets and international trade, the effects of regulation, the origins of inequality, the connection between work and wages, the economic consequences of immigration, or the possible causes of unemployment. These beliefs are crucial in forming people's political beliefs and in shaping their reception of different (...) policies. Yet, they often conflict with elementary principles of economic theory and are often described as the consequences of ignorance, irrationality, or specific biases. As we will argue, these past perspectives fail to predict the particular contents of popular folk-economic beliefs and, as a result, there is no systematic study of the cognitive factors involved in their emergence and cultural success. Here we propose that the cultural success of particular beliefs about the economy is predictable if we consider the influence of specialized, largely automatic inference systems that evolved as adaptations to ancestral human small-scale sociality. These systems, for which there is independent evidence, include free-rider detection, fairness-based partner choice, ownership intuitions, coalitional psychology, and more. Information about modern mass-market conditions activates these specific inference systems, resulting in particular intuitions, for example, that impersonal transactions are dangerous or that international trade is a zero-sum game. These intuitions in turn make specific policy proposals more likely than others to become intuitively compelling, and, as a consequence, exert a crucial influence on political choices. (shrink)

The current paper provides an overview of treatment noncompliance at various points in the treatment pathway, especially with respect to treatment for Pelvic-floor Dysfunction. The effects of noncompliance on healthcare are considered, and examples of supporting patients psychologically to increase compliance are discussed. An outline of a method to identify costs of non-compliance, and where such costs most intensely impact the healthcare system, is provided. It is suggested that psychological support is effective in terms of increased compliance and improved healthcare (...) economics. The model is presented for PFD, but the principles developed can be generalised to many aspects of healthcare. (shrink)

To understand the human capacity for psychological altruism, one requires a proper understanding of how people actually think and feel. This paper addresses the possible relevance of recent findings in experimental economics and neuroeconomics to the philosophical controversy over altruism and egoism. After briefly sketching and contextualizing the controversy, we survey and discuss the results of various studies on behaviourally altruistic helping and punishing behaviour, which provide stimulating clues for the debate over psychological altruism. On closer analysis, these studies prove (...) less relevant than originally expected because the data obtained admit competing interpretations – such as people seeking fairness versus people seeking revenge. However, this mitigated conclusion does not preclude the possibility of more fruitful research in the area in the future. Throughout our analysis, we provide hints for the direction of future research on the question. (shrink)

ABSTRACTWhether behavioural economics has a fundamental influence on economics is debated by behavioural and heterodox economists as well as by methodologists and historians of economics. At the core of this debate is the question whether behavioural economics is shaped by large-scale content imports from psychology or whether these transfers have been too selective to challenge dominant approaches in economics. This study contributes to the debate in analysing a variety of bibliographic data from the disciplinary boundary between economics and (...) class='Hi'>psychology. Two data sets from the boundary of behavioural economics and psychology are compared to sets of economic and psychology publications in quantifying the use of mathematics, the share of empirical contributions, the authors' academic background, and their cross-citations via network analysis. In contrast to proposals made by some methodologists and behavioural economists, the statistical results confirm content transfers from psychology via behavioural ec... (shrink)

Hertwig and Ortmann suggest greater standardization of procedures in experimental psychology to help with problems of replicability and consistency of findings. It is argued that, this view is inconsistent with their other interesting proposals, and heterogeneity of method is appropriate in psychology.

Should economics study the psychological basis of agents' choice behaviour? I show how this question is multifaceted and profoundly ambiguous. There is no sharp distinction between "mentalist'' answers to this question and rival "behavioural'' answers. What's more, clarifying this point raises problems for mentalists of the "functionalist'' variety (Dietrich and List, 2016). Firstly, functionalist hypotheses collapse into hypotheses about input--output dispositions, I show, unless one places some unwelcome restrictions on what counts as a cognitive variable. Secondly, functionalist hypotheses make some (...) risky commitments about the plasticity of agents' choice dispositions. (shrink)

Invention is an investment in which the costs of the Research and Development project balance future returns. Those returns depend on objective factors like wage and capital costs but also on subjective factors because they are future projections. The more optimistic the inventor, the higher are the projected returns. Baumard uses Life History Theory to relate optimism to the affluence of inventors and their societies.

(1995). Prediction in chaotic social, economic, and political conditions: The conflict between traditional chaos theory and the psychology of prediction, and some implications for general evolution theory. World Futures: Vol. 44, No. 1, pp. 15-31.

Contingent valuation of the environment has proven popular amongst environmental economists in recent years and has increased the role of monetary valuation in public policy. However, the underlying economic model of human psychology fails to explain why certain types of stated behaviour are observed. Thus, good scope exists for interdisciplinary research in the area of economics and psychology with regard to environmental valuation. A critical review is presented here of some recent research by social psychologists in the (...) US attempting to explain stated behaviour in contingent valuation. Attitudinal scales have been used to analyse the role of ecocentric, biocentric and altruistic motives for giving. However, the research is shown to draw some potentially misleading conclusions and be unrepresentative of contingent valuation. Two recent economic studies using contingent valuation are then reported and shown to have identified non-economic motives for WTP. The complexity of value formation and expression is found to go far beyond that generally accepted by economic models. Greater consideration of the role played by attitudes and ethical considerations then becomes relevant to the interpretation of results being used in standard cost-benefit analysis and environmental policy. (shrink)

Both economists and psychologists are interested in understanding decision making under uncertainty. Yet, they rely on different concepts to analyse human behaviour: economists use economic preference parameters rooted in utility theory, while psychologists use personality traits to describe responses to uncertain situations. Using a large sample of university students, this study examines and contrasts five economic preference parameters and six psychological personality traits that are commonly used to study individuals’ attitudes towards uncertainty. A novelty of this paper is (...) including both the economic concept of ambiguity aversion as well as the personality trait of ambiguity intolerance. We find that standard economic preference measures based on incentivized choice tasks seem to capture rather different characteristics than psychological personality traits. In contrast, economic preference measures obtained from self-assessment questions appear more related to personality traits, especially ambiguity intolerance. (shrink)

This work aims to solve the complex problems of non-linearity, instability, and multiple economic factors in the tax forecast of the ceramic industry to ensure the sustainable development of the ceramic industry. The key influential indicators of the tax forecast are obtained by analyzing the principal components affecting the tax index. In addition, a human-computer interaction system is established based on cognitive psychology theory to improve the user-friendliness of tax analysis. At the same time, the tax data of (...) the ceramic industry in Jingdezhen City, Jiangxi Province in different years are used for the empirical analysis of the tax prediction of different prediction models, including particle swarm optimization algorithm, and fusion algorithm, and support vector machine. This work comprehensively analyzes the influence of the optimized tax supervision mode on the economic development of the ceramic industry and provides ideas for the development of the ceramic industry in Jingdezhen. The research results demonstrate that the main indicator affecting tax revenue is the added value of the primary and secondary industries. The optimized SVM based on grid search method can provide a comprehensive data base for tax forecasting. The optimization of the computer system based on cognitive psychology improves the model prediction accuracy by 10%, and the absolute error decreases from 6.9 to 1.8%. The tax forecast results indicate that the tax imbalance in Jingdezhen is increasing. Therefore, the government needs to attach great importance to the development of the ceramic industry and strictly implement the tax policy. The tax supervision model can alleviate the problems of low fiscal contribution rate, tax evasion, and management loopholes. In addition, the SVM tax prediction model optimized by grid search method will lay a theoretical foundation for the research and application of taxation in the ceramic industry. (shrink)

ArgumentToday's models of temporal discounting are the result of multiple interdisciplinary exchanges between psychology and economics. Although these exchanges did not result in an integrated discipline, they had important effects on all disciplines involved. The paper describes these exchanges from the 1930s onwards, focusing on two episodes in particular: an attempted synthesis by psychiatrist George Ainslie and others in the 1970s; and the attempted application of this new discounting model by a generation of economists and psychologists in the 1980s, (...) which ultimately ended in thediversity of measurements disappointment. I draw four main conclusions. First, multiple notions of temporal discounting must be conceptually distinguished. Second, behavioral economics is not an integration or unification of psychology and economics. Third, the analysis identifies some central disciplinary markers that distinguish modeling strategies in economics and psychology. Finally, it offers a case of interdisciplinary success that does not fit the currently dominant account of interdisciplinarity as integration. (shrink)

The book highlights the ethical aspects and issues that are inherent to economics in the context of today's prominent social institutions. It reviews a range of problems concerning dominant social institutions, namely markets, government agencies, corporate entities, financial networks, and religious systems. Further, in each case, the book takes a detailed look at the economic problems as they arise within a broader sociological and political environment, taking into account the respective ethical/philosophical paradigms. It analyzes from an ethical point of (...) view topics like the evolution of economic thought, happiness and spirituality, and human values in relation to ethics. (shrink)

Does the contemporary built environment—the ensemble of our humanly created surroundings—make us happy? This question prompts a consideration of the psychological dimensions of economic value, and of Tibor Scitovsky's revisions of standard economic theory. With Scitovsky as a starting point, a model of value based on modern complexity theory and a Maslow‐like rendition of human needs can account for some of the more important exceptions to the law of diminished marginal utility, including those that may undermine the built (...) environment in a market economy. (shrink)

This timely and important book presents a unique study of happiness from both economic and political perspectives.

This book provides a rich, systematic, and accessible introduction to moral psychology, aimed at undergraduate philosophy and psychology majors. There are eight chapters, in addition to a short introduction, prospective conclusion, and extensive bibliography. The recipe for each chapter will be: a) to introduce a philosophical topic (e.g., altruism, virtue, preferences, rules) and some prominent positions on it, without assuming prior acquaintance on the part of the reader b) to canvass and explain the relevance of a particular domain (...) of empirical inquiry (e.g., evolutionary psychology, behavioral economics, neuroscience) to the topic c) to argue for some tentative conclusions about the topic d) to suggest further avenues for conceptual and empirical research The guiding theme of the book is that moral philosophy without psychological content is empty, whereas psychological investigation without philosophical insight is blind. Thus, I advocate a holistic approach that pictures moral psychology as a project of collaborative inquiry into the descriptive and normative aspects of the human condition. Ideally, students will come away from (a course built around) the book with the sense that, though philosophy may not be the queen of the sciences, its role is not merely to interpret scientific results. (shrink)

'Economics and the Mind' brings economists and philosophers of the mind together to explore the intersection of their disciplines.

In experimental economics one can confront a “don’t!”, as in “do not deceive your participants!”, as well as a “do!”, as in “incentivize choice making!”. Neither exists in experimental psychology. Further controversies exist in data collection methods, e.g., play strategy (vector) method in game experiments, and how to guarantee external and internal validity by describing experimental scenarios by field-related vignettes or by abstract, often formal, rules as it is used in decision and game theory. We emphasize that differences between (...) the experimental methodology of the two disciplines are minor rather than substantial and suggest that such differences should be resolved, as much as possible, through empirical research. Rather than focusing on familiar debates, we suggest to substitute the revealed-motive approach in experimental economics by designs whose data not only inform about choice, but also about the reasoning dynamics. (shrink)