ABSTRACT OF PAPER
Title: What is behavioural economics about?
Author:
Behavioural Economics ‘uses facts, models, and methods from neighbouring sciences’ and it is ‘deeply rooted in empirical findings,’ this way it ‘increases the explanatory power of economics by providing it with more realistic psychological foundations,’ and it advances economics on its own terms by means of ‘generating theoretical insight, making more accurate predictions, and suggesting better policies’ (Camerer & Loewenstein 2004). Indeed the results of Behavioural Economics have often been celebrated as ‘well documented and robust’ and ‘important’ even by its critics (e.g. Dupont & Lee 2002). And of course they are. But one is sometimes left wondering: they are well documented, robust, and important what? Are they facts about human psychology, observations of empirical phenomena, or perhaps theoretical concepts? Do they express genuine preferences or are they judgement failures? Do they originate in some ancestral emotion? We search for answers through a systematic reflection on some central findings and concepts of behavioural economics: Endowment Effect, Status Quo Bias, and Loss Aversion. These issues bear consequences both for an assessment of the contributions of behavioural economics and for its relationship with the mainstream.
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