Behavioral Economics

Paper Summary:

This paper defines and explains the field of behavioral economics and highlights the major differences between behavioral economics and neo-classical economic theory. The paper goes on to demonstrate the value that behavioral economics has to offer to all aspects of the field of economics and how it can benefit the economic decision making process.

From the Paper:

"In their article on Behavioral Economics, Sendhil Mullainathan and Richard Thaler explain the importance and relevance of this emerging sub-field within the field of economics. The authors begin their discourse on behavioral economics by first placing in context the focus of the sub-field and the essential differences with the main branch of economics. Behavioral Economics combines the field of psychology and economics in order to investigate "what happens to markets in which some of the agents display human limitations and complications?" (Mullainathan & Thaler) In other words, behavioral economics focuses on understanding socio-psychological behavioral aspects of economic agents."

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