IDEAS home Printed from https://ideas.repec.org/a/taf/jeduce/v42y2011i3p255-269.html
   My bibliography  Save this article

Microeconomics and Psychology

Author

Listed:
  • Steven Beckman
  • Lanxin Chen
  • Greg DeAngelo
  • W. James Smith
  • Xieting Zhang

Abstract

Psychologists such as the Nobel Prize--winner Daniel Kahneman challenge the major assumptions of microeconomics: the rational pursuit of self-interest given unchanging tastes. One may explore these issues through a questionnaire that may be distributed in class. How many of your students behave as the psychologists predict? Should economists adapt their theories of the market to reflect their findings? Prospect theory, changes in reference points, fairness, framing effects, loss aversion, the ultimatum game, herding, context dependence, the dictator game, preference reversals and the structure of the human brain are all illustrated through simple questions. The body of this article connects the questions to the literature and introduces the debates between economists and psychologists.

Suggested Citation

  • Steven Beckman & Lanxin Chen & Greg DeAngelo & W. James Smith & Xieting Zhang, 2011. "Microeconomics and Psychology," The Journal of Economic Education, Taylor & Francis Journals, vol. 42(3), pages 255-269, July.
    • Handle: RePEc:taf:jeduce:v:42:y:2011:i:3:p:255-269
    DOI: 10.1080/00220485.2011.581943
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1080/00220485.2011.581943
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1080/00220485.2011.581943?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Kahneman, Daniel & Knetsch, Jack L & Thaler, Richard H, 1986. "Fairness and the Assumptions of Economics," The Journal of Business, University of Chicago Press, vol. 59(4), pages 285-300, October.
    2. Daniel Kahneman, 2003. "A Psychological Perspective on Economics," American Economic Review, American Economic Association, vol. 93(2), pages 162-168, May.
    3. B. Douglas Bernheim & Antonio Rangel, 2004. "Addiction and Cue-Triggered Decision Processes," American Economic Review, American Economic Association, vol. 94(5), pages 1558-1590, December.
    4. repec:bla:jfinan:v:53:y:1998:i:5:p:1775-1798 is not listed on IDEAS
    5. Esther-Mirjam Sent, 2004. "Behavioral Economics: How Psychology Made Its (Limited) Way Back Into Economics," History of Political Economy, Duke University Press, vol. 36(4), pages 735-760, Winter.
    6. Thaler, Richard H & Shefrin, H M, 1981. "An Economic Theory of Self-Control," Journal of Political Economy, University of Chicago Press, vol. 89(2), pages 392-406, April.
    7. Herbert A. Simon, 1955. "A Behavioral Model of Rational Choice," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 69(1), pages 99-118.
    8. Daniel Kahneman & Amos Tversky, 2013. "Prospect Theory: An Analysis of Decision Under Risk," World Scientific Book Chapters, in: Leonard C MacLean & William T Ziemba (ed.), HANDBOOK OF THE FUNDAMENTALS OF FINANCIAL DECISION MAKING Part I, chapter 6, pages 99-127, World Scientific Publishing Co. Pte. Ltd..
    9. Fehr, Ernst & Fischbacher, Urs & Kosfeld, Michael, 2005. "Neuroeconomic Foundations of Trust and Social Preferences," IZA Discussion Papers 1641, Institute of Labor Economics (IZA).
    10. Guth, Werner & Schmittberger, Rolf & Schwarze, Bernd, 1982. "An experimental analysis of ultimatum bargaining," Journal of Economic Behavior & Organization, Elsevier, vol. 3(4), pages 367-388, December.
    11. Ariel Rubinstein, 2003. ""Economics and Psychology"? The Case of Hyperbolic Discounting," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 44(4), pages 1207-1216, November.
    12. Ernst Fehr & Urs Fischbacher & Michael Kosfeld, 2005. "Neuroeconomic Foundations of Trust and Social Preferences: Initial Evidence," American Economic Review, American Economic Association, vol. 95(2), pages 346-351, May.
    13. Charles R. Plott & Kathryn Zeiler, 2007. "Exchange Asymmetries Incorrectly Interpreted as Evidence of Endowment Effect Theory and Prospect Theory?," American Economic Review, American Economic Association, vol. 97(4), pages 1449-1466, September.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Pedro Moreira, 2015. "The Perception of Economic Value Limits: A Study on the Ultimatum Game Decision Patterns," Proceedings of International Academic Conferences 2503337, International Institute of Social and Economic Sciences.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Drakopoulos, Stavros A., 2022. "The Conceptual Resilience of the Atomistic Individual in Mainstream Economic Rationality," MPRA Paper 112944, University Library of Munich, Germany.
    2. Eduard Marinov, 2017. "The 2017 Nobel Prize in Economics," Economic Thought journal, Bulgarian Academy of Sciences - Economic Research Institute, issue 6, pages 117-159.
    3. Committee, Nobel Prize, 2017. "Richard H. Thaler: Integrating Economics with Psychology," Nobel Prize in Economics documents 2017-1, Nobel Prize Committee.
    4. Stefano DellaVigna, 2009. "Psychology and Economics: Evidence from the Field," Journal of Economic Literature, American Economic Association, vol. 47(2), pages 315-372, June.
    5. Dorian Jullien & Alexandre Truc, 2024. "Towards a History of Behavioral and Experimental Economics in France," GREDEG Working Papers 2024-23, Groupe de REcherche en Droit, Economie, Gestion (GREDEG CNRS), Université Côte d'Azur, France.
    6. Gebhard Kirchgässner, 2014. "On Self-Interest and Greed," CREMA Working Paper Series 2014-12, Center for Research in Economics, Management and the Arts (CREMA).
    7. Dohmen, Thomas, 2014. "Behavioral labor economics: Advances and future directions," Labour Economics, Elsevier, vol. 30(C), pages 71-85.
    8. Theresa Michl & Stefan Taing, 2010. "An Economic and Neuroscientific Comparison of Strategic Decision-making," Chapters, in: Angela A. Stanton & Mellani Day & Isabell M. Welpe (ed.), Neuroeconomics and the Firm, chapter 10, Edward Elgar Publishing.
    9. Daniele SCHILIRÒ, 2013. "Bounded Rationality: Psychology, Economics And The Financial Crises," Theoretical and Practical Research in the Economic Fields, ASERS Publishing, vol. 4(1), pages 97-108.
    10. Elisabeth Gsottbauer & Jeroen Bergh, 2011. "Environmental Policy Theory Given Bounded Rationality and Other-regarding Preferences," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 49(2), pages 263-304, June.
    11. repec:hal:cesptp:halshs-04810987 is not listed on IDEAS
    12. Alexandre Truc, 2022. "The Disciplinary Mobility of Core Behavioral Economists," GREDEG Working Papers 2022-27, Groupe de REcherche en Droit, Economie, Gestion (GREDEG CNRS), Université Côte d'Azur, France.
    13. Hobman, Elizabeth V. & Frederiks, Elisha R. & Stenner, Karen & Meikle, Sarah, 2016. "Uptake and usage of cost-reflective electricity pricing: Insights from psychology and behavioural economics," Renewable and Sustainable Energy Reviews, Elsevier, vol. 57(C), pages 455-467.
    14. Daniel Kahneman, 2003. "A Psychological Perspective on Economics," American Economic Review, American Economic Association, vol. 93(2), pages 162-168, May.
    15. Gowdy, John M., 2008. "Behavioral economics and climate change policy," Journal of Economic Behavior & Organization, Elsevier, vol. 68(3-4), pages 632-644, December.
    16. Margit Osterloh, 2007. "Psychologische Ökonomik: Integration statt Konfrontation," Schmalenbach Journal of Business Research, Springer, vol. 59(56), pages 82-111, January.
    17. Polowczyk Jan, 2021. "A synthesis of evolutionary and behavioural economics," Economics and Business Review, Sciendo, vol. 7(3), pages 16-34, September.
    18. James C. Cox & Vjollca Sadiraj, 2018. "Incentives," Experimental Economics Center Working Paper Series 2018-01, Experimental Economics Center, Andrew Young School of Policy Studies, Georgia State University.
    19. Yildiz, Özgür, 2014. "Lehren aus der Verhaltensökonomik für die Gestaltung umweltpolitischer Maßnahmen [Lessons from behavioral economics for the design of environmental policy measures]," MPRA Paper 59360, University Library of Munich, Germany.
    20. Miklós Antal & Ardjan Gazheli & Jeroen C.J.M. van den Bergh, 2012. "Behavioural Foundations of Sustainability Transitions. WWWforEurope Working Paper No. 3," WIFO Studies, WIFO, number 46424.
    21. Uwe Jirjahn & Vanessa Lange, 2015. "Reciprocity and Workers’ Tastes for Representation," Journal of Labor Research, Springer, vol. 36(2), pages 188-209, June.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:taf:jeduce:v:42:y:2011:i:3:p:255-269. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Chris Longhurst (email available below). General contact details of provider: http://www.tandfonline.com/VECE20 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.