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Consolidating behavioural economics and rational choice theory: Insights from inequality research

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  • Klarizze Anne Martin Puzon
  • Rachel M. Gisselquist

Abstract

Using illustrations from research on inequality, this paper offers evidence on the strengths of 'behavioural synthesis', i.e. the reconciliation between neoclassical and behavioural economics. We compare how theoretical models of absolute and relative inequality have evolved from assumptions of income maximization to status-seeking competition, and to altruism. We emphasize the relevance of experiments in testing competing theories and mitigating empirical shortcomings. We conclude that methodological pluralism, i.e.

Suggested Citation

  • Klarizze Anne Martin Puzon & Rachel M. Gisselquist, 2021. "Consolidating behavioural economics and rational choice theory: Insights from inequality research," WIDER Working Paper Series wp-2021-76, World Institute for Development Economic Research (UNU-WIDER).
    • Handle: RePEc:unu:wpaper:wp-2021-76
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    References listed on IDEAS

    as
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    Keywords

    Inequality; Behavioral economics; Behaviour; Methodology (Economics);
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