CiteULike: yoav library [11 articles]

Maps of Bounded Rationality: Psychology for Behavioral Economics

Daniel Kahneman — 2006-11-22T18:27:58-00:00

The American Economic Review, Vol. 93, No. 5. (2003), pp. 1449-1475.

Le Comportement de l'Homme Rationnel devant le Risque: Critique des Postulats et Axiomes de l'Ecole Americaine

M Allais — 2005-08-18T17:39:16-00:00

Econometrica, Vol. 21, No. 4. (1953), pp. 503-546.

Incorporating Fairness into Game Theory and Economics

Matthew Rabin — 2006-01-27T14:39:04-00:00

The American Economic Review, Vol. 83, No. 5. (1993), pp. 1281-1302.

People like to help those who are helping them, and to hurt those who are hurting them. Outcomes reflecting such motivations are called fairness equilibria. Outcomes are mutual-max when each person maximizes the other's material payoffs, and mutual-min when each person minimizes the other's payoffs. It is shown that every mutual-max or mutual-min Nash equilibrium is a fairness equilibrium. If payoffs are small, fairness equilibria are roughly the set of mutual-max and mutual-min outcomes; if payoffs are large, fairness equilibria are roughly the set of Nash equilibria. Several economic examples are considered, and possible welfare implications of fairness are explored.

Constructivist and Ecological Rationality in Economics

Vernon Smith — 2007-11-23T01:58:50-00:00

The American Economic Review, Vol. 93, No. 3. (2003), pp. 465-508.

A Behavioral Model of Rational Choice

Herbert Simon — 2006-12-15T09:58:58-00:00

The Quarterly Journal of Economics, Vol. 69, No. 1. (1955), pp. 99-118.

Introduction, 99.--I. Some general features of rational choice, 100.--II. The essential simplifications, 103.--III. Existence and uniqueness of solutions, 111.--IV. Further comments on dynamics, 113.--V. Conclusion, 114.--Appendix, 115.

The Analysis of the Firm: Rationalism, Conventionalism, and Behaviorism

Julius Margolis — 2007-11-21T19:43:30-00:00

The Journal of Business, Vol. 31, No. 3. (1958), pp. 187-199.

Sensationalism

Joseph Agassi — 2007-11-21T17:35:05-00:00

Conventionalism and Economic Theory

Lawrence Boland — 2007-11-21T17:32:04-00:00

Philosophy of Science, Vol. 37, No. 2. (1970), pp. 239-248.

Roughly speaking all economists can be divided into two groups--those who agree with Milton Friedman and those who do not. Both groups, however, espouse the view that science is a series of approximations to a demonstrated accord with reality. Methodological controversy in economics is now merely a Conventionalist argument over which comes first--simplicity or generality. Furthermore, this controversy in its current form is not compatible with one important new and up and coming economic (welfare) theory called "the theory of the Second Best." In this paper I offer a Second Best meta-theory that says that (1) any compromise between simplicity and generality must yield a theory which is "third best" by these Conventionalist criteria; and (2) there exists a better way than a compromise.

Mental Accounting and Consumer Choice

Richard Thaler — 2007-11-20T02:31:55-00:00

Marketing Science, Vol. 4, No. 3. (1985), pp. 199-214.

A new model of consumer behavior is developed using a hybrid of cognitive psychology and microeconomics. The development of the model starts with the mental coding of combinations of gains and losses using the prospect theory value function. Then the evaluation of purchases is modeled using the new concept of "transaction utility". The household budgeting process is also incorporated to complete the characterization of mental accounting. Several implications to marketing, particularly in the area of pricing, are developed.

Economic Methodology in the Face of Uncertainty: The Modelling Methods of Keynes and the Post-Keynesians

JA Kregel — 2007-11-22T00:46:27-00:00

The Economic Journal, Vol. 86, No. 342. (1976), pp. 209-225.

A Fine Is a Price

Uri Gneezy — 2007-11-21T17:03:38-00:00

The Journal of Legal Studies, Vol. 29, No. 1. (2000), pp. 1-17.

The deterrence hypothesis predicts that the introduction of a penalty that leaves everything else unchanged will reduce the occurrence of the behavior subject to the fine. We present the result of a field study in a group of day-care centers that contradicts this prediction. Parents used to arrive late to collect their children, forcing a teacher to stay after closing time. We introduced a monetary fine for late-coming parents. As a result, the number of late-coming parents increased significantly. After the fine was removed no reduction occurred. We argue that penalties are usually introduced into an incomplete contract, social or private. They may change the information that agents have, and therefore the effect on behavior may be opposite of that expected. If this is true, the deterrence hypothesis loses its predictive strength, since the clause "everything else is left unchanged" might be hard to satisfy.