scholarly journals THE EVOLUTION OF HOMO ECONOMICUS

2016 ◽  
pp. 129-142
Author(s):  
N. V. Komarovskaia
Keyword(s):  
Decision Making ◽  
Behavioral Economics ◽  
Human Behavior ◽  
Law And Economics ◽  
Interdisciplinary Approach ◽  
Economic Thought ◽  
Economic Behavior ◽  
Economic Research ◽  
Homo Economicus ◽  
Economic Decision Making

The article provides a review of the ways in which interdisciplinary research in modern economic thought gives a more realistic understanding of human behavior and economic decision making. On the one hand, economic imperialism drove wider application of economics methods across social sciences and brought about new interdisciplinary fields, such as law and economics, economic sociology, public choice theory, etc. On the other hand, the origin of behavioral economics, experimental economics, and neuroeconomics bridging psychology, neurobiology, and economics influences the change in the methodology used by the economics itself and fuels transformation of the model of rational economic behavior 'homo economicus', one of the central assumptions of the neoclassical economics. George Akerlof and Robert Shiller's animal spirits, prospect theory of Daniel Kahneman and Amos Tversky, research by Amartya Sen, Daniel McFadden, Vernon Smith, and other economists focusing on decision making either significantly limit, or supplement the homo economicus concept providing a deeper insight into the nature of human rationality. Behavioral economics has already become so strong as a separate discipline that it can be classified into two streams - Classical and Modern, and its main principles should be incorporated into a basic course of traditional economics. The achievements of behavioral economics yield higher quality of economic research and forecasting. Interdisciplinary approach to the human behavior studies and transformation of homo economicus offer new tools for the development policy making.

scholarly journals THEORETICAL BASICS AND PRACTICAL ASPECTS OF BEHAVIORAL ECONOMICS

2019 ◽  
Vol 4 (8) ◽  
pp. 68-73
Author(s):  
Marine Natsvaladze
Keyword(s):  
Decision Making ◽  
Behavioral Economics ◽  
Human Behavior ◽  
Academic Discipline ◽  
Human Mind ◽  
Economic Research ◽  
Optimal Decision ◽  
Interdisciplinary Approaches ◽  
Value Propositions ◽  
Classical Economic

Traditional Economics looks at the persons as at some kind of rational machine which takes into consideration all available information and then makes optimal decision. Re- ality is rather different. The behavioral economics claims that there is no rational «economic human” and probably will nev- er exist. Person’s behavior is irrational and this irrationality is not random and clueless. Vice-versa - this irrationality is systemic and predictable. Behavioral economics explores what affects people›s economic decisions and the consequences of those decisions for market prices, returns, and resource allocation. Tradition- al economic research assumes that people›s economic deci- sions are based on the rule of maximizing utility. Behavioral economics uses experiments that observe human behavior in order to uncover how we think. Behavior- al economics has been called the science of decision-making. It is a growing academic discipline which uses experiments that observe human behavior in order to uncover how we think. Behavioral economics is about understanding com- mon decision mistakes that people make and why they make them. In particular, a large aspect of behavioral economics is concerned with the gap between intention and action. Classical economic theory assumes that individuals are rational. However, in the real world, we often see irrational behavior – decisions which don›t maximize utility but can cause a loss of economic welfare. It means economists need to take into account the potential for irrationality. Successful marketers must have a profound understand- ing of the consumer’s thought process in order to create a suc- cessful marketing campaign. By understanding the consumer’s decision-making process, marketers are able to develop value propositions that really fit the consumer’s needs. The impor- tance of understanding behavioral economics for marketers is immeasurable as it allows for a better understanding of the human mind. Behavioral economics allows marketing profes- sionals to optimize marketing strategies and get real results. In the article are reviewed applied aspects of behavioral economics, also theoretical and practical results of researches. These results will be useful in company management, for pol- iticians, in private decision making as they give different per- spective to rational-functional models. In case of ignoring the interdisciplinary approaches, integration of economics and psy- chology can result in waste of resources and wrong decisions.

To Understand the Informal (on the Book BY V. L. Tambovtsev “Economics of Informal Institutions”)

2015 ◽  
pp. 151-158
Author(s):  
A. Zaostrovtsev
Keyword(s):  
Social Psychology ◽  
Detailed Analysis ◽  
Human Behavior ◽  
Interdisciplinary Approach ◽  
Informal Institutions ◽  
Economic Thought ◽  
History Of ◽  
Original Classification

The review considers the first attempt in the history of Russian economic thought to give a detailed analysis of informal institutions (IF). It recognizes that in general it was successful: the reader gets acquainted with the original classification of institutions (including informal ones) and their genesis. According to the reviewer the best achievement of the author is his interdisciplinary approach to the study of problems and, moreover, his bias on the achievements of social psychology because the model of human behavior in the economic mainstream is rather primitive. The book makes evident that namely this model limits the ability of economists to analyze IF. The reviewer also shares the author’s position that in the analysis of the IF genesis the economists should highlight the uncertainty and reject economic determinism. Further discussion of IF is hardly possible without referring to this book.

scholarly journals Groups Make Better Self-Interested Decisions

2012 ◽  
Vol 26 (3) ◽  
pp. 157-176 ◽  
Author(s):  
Gary Charness ◽  
Matthias Sutter
Keyword(s):  
Decision Making ◽  
Group Decision Making ◽  
Group Decision ◽  
Economic Behavior ◽  
Economic Research ◽  
Individual Decision ◽  
Bottom Line ◽  
Individual Decision Making ◽  
Cognitive Limitations ◽  
Individual Decisions

In this paper, we describe what economists have learned about differences between group and individual decision-making. This literature is still young, and in this paper, we will mostly draw on experimental work (mainly in the laboratory) that has compared individual decision-making to group decision-making, and to individual decision-making in situations with salient group membership. The bottom line emerging from economic research on group decision-making is that groups are more likely to make choices that follow standard game-theoretic predictions, while individuals are more likely to be influenced by biases, cognitive limitations, and social considerations. In this sense, groups are generally less “behavioral” than individuals. An immediate implication of this result is that individual decisions in isolation cannot necessarily be assumed to be good predictors of the decisions made by groups. More broadly, the evidence casts doubts on traditional approaches that model economic behavior as if individuals were making decisions in isolation.

Law and Prosocial Behavior

2014 ◽  
pp. 194-212
Author(s):  
Lynn Stout
Keyword(s):  
Prosocial Behavior ◽  
Human Behavior ◽  
Law And Economics ◽  
Ultimatum Game ◽  
Social Dilemma ◽  
Dictator Game ◽  
Homo Economicus ◽  
Empirical Reality ◽  
The Social ◽  
Experimental Games

This chapter examines the relevance of prosocial behavior to law. It begins by tracing the history of the homo economicus model of human behavior, its role in contemporary behavioral law and economics, and why the concept of utility does not solve the problem of the model. It then looks at the emergence of a behavioral economics approach to human behavior that incorporates the empirical reality of prosociality without undermining the predictive power of economic analysis. It also discusses the empirical methodology known as experimental gaming, focusing on the application of three experimental games—the social dilemma game, dictator game, and ultimatum game—to study when and how people will act prosocially. In particular, the article considers three basic lessons about human behavior offered by the social dilemma game, ultimatum game, and dictator game. In addition, it explores how prosocial behavior influences regulation, negligence rules, and contracting, along with corporate law. The chapter concludes by stressing the value of incorporating prosocial behavior into the analysis of legal and policy problems.

scholarly journals Behavioral Economics: A Primer and Applications to the UN Sustainable Development Goal of Good Health and Well-Being

Reports ◽  
2021 ◽  
Vol 4 (2) ◽  
pp. 16
Author(s):  
Robert Siegel ◽  
Katelyn Gordon ◽  
Linda Dynan
Keyword(s):  
Decision Making ◽  
Sustainable Development ◽  
Behavioral Economics ◽  
Well Being ◽  
Good Health ◽  
Individual Choice ◽  
Economic Decision ◽  
Economic Decision Making ◽  
Health Related ◽  
Health And Well Being

Behavioral economics (BE) is a relatively new field within economics that incorporates insights from psychology that can be harnessed to improve economic decision making with the potential to enhance good health and well-being of individuals and societies, the third of the United Nations Sustainable Development Goals. While some of the psychological principles of economic decision making were described as far back as the 1700s by Adam Smith, BE emerged as a discipline in the 1970s with the groundbreaking work of psychologists Daniel Kahneman and Amos Tversky. We describe the basic concepts of BE, heuristics (decision-making shortcuts) and their associated biases, and the BE strategies framing, incentives, and economic nudging to overcome these biases. We survey the literature to identify how BE techniques have been employed to improve individual choice (focusing on childhood obesity), health policy, and patient and healthcare provider decision making. Additionally, we discuss how these BE-based efforts to improve health-related decision making can lead to sustaining good health and well-being and identify additional health-related areas that may benefit from including principles of BE in decision making.

Investment Decisions Based on Probability Statistics Mathematical Model in Mordern Manufacturing Engineering

2014 ◽  
Vol 484-485 ◽  
pp. 196-201
Author(s):  
Li Chen ◽  
Hai Xia Wang
Keyword(s):  
Mathematical Modeling ◽  
Mathematical Model ◽  
Decision Making ◽  
Economic Development ◽  
Investment Decisions ◽  
Economic Research ◽  
Economic Problems ◽  
Economic Decision Making ◽  
Modern Engineering ◽  
Probability And Statistics

With the globalization of economic development, the application of mathematics throughout the various areas of probability and statistics is the use of modern engineering, social and economic research is a core of mathematics. Mathematical modeling provides a new way of thinking to the economic problems from the economic decision-making issues mathematical model of probability and statistics in the economic field.

scholarly journals RELATIVE CAPITALIST SYSTEMS AND FAIRNESS IN THE BALTICS: THE CASE OF LITHUANIA

Ekonomika ◽  
2013 ◽  
Vol 92 (4) ◽  
pp. 82-99 ◽  
Author(s):  
Maik Huettinger ◽  
Aras Zirgulis
Keyword(s):  
Decision Making ◽  
Behavioral Economics ◽  
Loss Aversion ◽  
Price Change ◽  
Framing Effects ◽  
Unique Form ◽  
Economic Decision ◽  
Economic Decision Making ◽  
The Baltic ◽  
Different Cultures

Abstract. This paper deals with the concept of fairness as it is applied to economic decision making in different cultures. The objective of the research is to determine whether the concept of fairness can be applied universally throughout all cultures by doing a study in Lithuania and comparing it to similar studies done in other countries. Lithuania was chosen because it belongs to the group of the Baltic advanced transition countries with their own unique form of capitalism. We find that Lithuanians are more apt to consider price or wage changes as fair as long as there is an underlying macroeconomic reasoning for the price change. These effects were found to hold true in spite of the framing effects of loss aversion found in previous studies.Key words: behavioral economics, fairness, capitalism, Baltics, Lithuania

scholarly journals Surveying Financial Decisions? From Homo Economicus to Historical Specificity and J.S. Mill’s Cultural–Institutional Individualism

2021 ◽  
Vol 3 (1) ◽  
pp. 1
Author(s):  
Manolis Manioudis ◽  
Dimitra Giardoglou
Keyword(s):  
Human Action ◽  
Economic Thought ◽  
Economic Behavior ◽  
History Of Economic Thought ◽  
Economic Factors ◽  
Homo Economicus ◽  
Financial Decisions ◽  
Human Decision ◽  
History Of ◽  
Historical Specificity

The aim of this paper is to evidence that non-economic factors, such as culture, emotions and ethics, can be seen as an important force in influencing human economic behavior and human action. This is conducted by putting the homo economicus notion into the perspective of the history of economic thought and, more specifically, of John Stuart Mill. More specifically, Mill’s institutional individualism, as is presented in his System of Logic (1843), and his relativity of economic doctrines construction, as is included in his Principles of Political Economy (1848), are synoptically delineated. Through Mill’s analysis, it is supported that cultural differences between different states of societies are determinant in understanding different behaviors. The paper concludes that Mill’s historical specificity and his more pluralistic version of cultural–institutional methodological individualism are more compatible in understanding human decision making.

scholarly journals DEVELOPMENT OF MARGINALISM IDEAS AND THEIR REFLECTION IN DOMESTIC ECONOMIC THOUGHT

2021 ◽  
Author(s):  
Liudmyla Krot
Keyword(s):  
Economic Theory ◽  
Economic Thought ◽  
Economic Behavior ◽  
Economic Research ◽  
Wide Field ◽  
Labor Theory Of Value ◽  
Labor Theory ◽  
World Economic ◽  
Modern Economic ◽  
Theory Of Value

In the conditions of transformational shifts and construction of the national competitive economy of Ukraine, society is a particularly attractive object for socio-economic research. The necessity of deep theoretical comprehension of the processes that take place and determination of the directions of further development of the domestic economy through the reference to the historical experience of studying market transformations by domestic economists is substantiated. There is a tendency of revival of scientific interest in historical and economic research in modern economic theory, where Ukrainian economic thought opens a wide field for scientific research. The aim of the article is to study the development of the ideas of marginalism and their reflection in the domestic economic thought in the works of representatives of the Kyiv School of Economics. The article presents the evolution of the theoretical and methodological foundations of the stages of the marginal revolution. It is noted that in Ukraine there were also powerful scientific centers of marginal orientation. It is claimed that the Kyiv School of Economics, headed by M. H. Bunge and D. I. Pikhno, initiated the subjective-psychological direction of political economy in Ukraine. It is determined that the peculiarity of O. Bilimovich's scientific thought was the complete denial of the labor theory of value. The article states that MI Tugan-Baranovsky has the primacy in the deep substantiation and creation of the synthesis of the labor theory of value and theories of marginal utility. It is noted that the combination of objective and subjective approaches on a methodological basis allowed him to avoid one-sided economic research. It is emphasized that the views of M. Tugan-Baranovsky in this problem were characterized by both undeniably powerful and theoretically weak aspects. Based on the study, it was concluded that marginalism as a powerful direction in the development of world economic theory had its own peculiarities of perception and development in Ukrainian economic thought of the second half of the nineteenth - early twentieth century. Research has revealed a critical perception of methodological individualism as a characteristic feature of the scientific tools of marginalism. It is noted that the fundamental ideas of marginalism in the Ukrainian economic thought of the second half of the XIX - early XX centuries. combined with the methods of the new historical and social schools. The article notes that at that time Ukrainian scientists took into account the influence of non-economic factors on the economic behavior of economic entities,

scholarly journals Hope in Economics

2020 ◽  
pp. 165-178
Author(s):  
Emma Pleeging ◽  
Martijn Burger
Keyword(s):  
Behavioral Economics ◽  
Subjective Experience ◽  
Well Being ◽  
Economic Behavior ◽  
Consumer Confidence ◽  
Economic Research ◽  
Future Research ◽  
Valuable Insight ◽  
Self Interest ◽  
The Difference

Abstract As a topic of research in economics, hope has not been very prevalent. Following the neo-classical paradigm, economists have tended to focus on rationality, self-interest, and universals. A normative and subjective experience such as hope was not believed to fit well with this perspective. However, the development of several heterodox economic approaches over the past decades, such as behavioral economics, has led to renewed attention being given to emotion, subjectivity, and normativity. Economic research on concepts related to hope, such as anticipatory feelings, (consumer) confidence, expectations and aspirations has consequently increased. In general, these studies find that hopeful feelings have a strong motivating power for (economic) behavior. By and large, the effects of hope seem to be positive, ranging from longevity and health to innovation and well-being. Nonetheless, there have also been indications that prompt caution, for example when it comes to false hopes, disappointment, or possible manipulation of societal hope. The field of economics has gained much valuable insight from existing research but we argue that it could gain from further definitional clarity. We discuss the difference between hope and related concepts such as optimism, in particular when it comes to economic research, and suggest topics for future research that could benefit from a focus on hope.

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