What is the meaning of behavioural economics?

This article examines the insights into how people actually behave from behavioural economics and how this affects economic explanation and prescription. It argues that implications for explanation are likely always to be contestable (because, as a new source of empirical evidence, behavioural econo...

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Bibliographic Details
Published in:Cambridge journal of economics 2013-09, Vol.37 (5), p.985-1000
Main Author: Heap, Shaun P. Hargreaves
Format: Article
Language:English
Subjects:
Autonomy
Behavior
Behavior modeling
Behavioral economics
Behavioural economics
Bioethics
Decision making models
Economic bubbles
Economic growth models
Economic models
Economic theory
Economics
Happiness
Personnel economics
Philosophy of science
Public policy
Rational choice theory
Satisfaction
Social policy
Social sciences
Studies
Welfare economics
Wellbeing
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Summary:This article examines the insights into how people actually behave from behavioural economics and how this affects economic explanation and prescription. It argues that implications for explanation are likely always to be contestable (because, as a new source of empirical evidence, behavioural economics encounters familiar problems with empiricism). The implications for prescription, however, are potentially significant, although not in the direction popularised by 'nudging'. Indeed, the behavioural insights suggest that public policy should be less concerned with forms of preference satisfaction and more concerned with individual autonomy. On many accounts of the philosophy of social science, the tension between these insights into behaviour and the dominant model of rational choice would likely consign behavioural economics to the margins of the discipline. In this context, however, this is not true, and the article concludes with a discussion of this puzzle.
ISSN:0309-166X
1464-3545
DOI:10.1093/cje/bes090