The Psychology of Economic Decisions: Volume One: Rationality and Well-Being

Psychologists and economists often ask similar questions about human behaviour. This volume brings together contributions from leaders in both disciplines. The editorial introduction discusses methodological differences between the two which have until now limited the development of mutually beneficial lines of research. Psychologists have objected to what they see as an excessive formalism in economic modelling and an unrealistic degree of sophistication in the behaviour of individuals, while economists criticize the absence of a general psychological framework into which most results can be fitted and the lack of welfare implications in their theories. The editors encourage scholars to exploit the strengths of each discipline - the ability of psychologists to understand the feelings and motivation of individuals; and the experience of economists to develop normative frameworks. The editors then highlight the links between the contributions by grouping them according to central themes in the study of rationality and well-being: 1. The causes and consequences of 'irrational behaviour'; 2. The role of anticipatory feelings and imperfect self-knowledge on decision-making; 3. The way in which memory of past events and cost of thinking affect current decisions; 4. The interaction between anticipated and remembered utility and its effects on the welfare of individuals; 5. Experimental practice on how to perform controlled experiments to test hypotheses. This exciting volume provides an excellent point of entry for anyone interested in the interface between economics and psychology. Contributors to this volume - Daniel Ariely (MIT) Roy F. Baumeister (Case Western Reserve University) Roland Benabou (Princeton University) Kent Berridge (University of Michigan) Ronit Bodner (Director, Learning Innovations, Jerusalem) Isabelle Brocas (ECARES; CEPR; University of Brussels) Andrew Caplin (New York University) Juan D. Carrillo (ECARES; CEPR; University of Brussels) David B. Centerbar (University of Virginia) Ernst Fehr (University of Zurich) Xavier Gabaix (MIT) Daniel Gilbert (Harvard University) Itzhak Gilboa (Tel Aviv University) Eva Gilboa-Schechtman (Bar-Ilan University) Ralph Hertwig (Max Planck Institute for Human Development, Berlin) Denis Hilton (University of Toulouse-II) Daniel Kahneman (Princeton University) John Leahy (Boston University) David Laibson (Harvard University; NBER) Nira Liberman (Indiana University) George Loewenstein (Carnegie Mellon University) Andreas Ortmann (Charles University and Academy of Sciences of the Czech Republic, Prague) Drazen Prelec (MIT) Jonathan W. Schooler (University of Pittsburgh) Jean Tirole (IDEI and GREMAQ, Toulouse; CERAS, Paris; MIT) Yaacov Trope (New York University) Jean-Robert Tyran (University of St. Gallen, Switzerland) Timothy D. Wilson (University of Virginia)