What is Behavioural Economics Like?

Alessandro Lanteri and Anna Carabelli ()

MPRA Paper from University Library of Munich, Germany

Abstract: Behavioural Economics’ milestones, Endowment Effect and Loss Aversion, have been recognized as ‘well documented,’ ‘robust,’ and ‘important’ even by the critics. But well documented, robust, and important what? Are these stylized facts, theoretical constructs, or psychological truths? Do they express genuine preferences or are they judgement mistakes? We discuss the problems with the nature of these claims in the lights of the goals of Behavioural Economics: to improve economics’ realisticness and to be considered mainstream. We argue that, under sensible interpretations of Loss Aversion and Endowment Effect, Behavioural Economics is neither more realistic than, nor part of the mainstream.

Keywords: Behavioural Economics; Decision-Making; Endowment Effect; Loss Aversion; Uncertainty (search for similar items in EconPapers)
JEL-codes: A12 D8 D81 (search for similar items in EconPapers)
Date: 2007-11
New Economics Papers: this item is included in nep-cbe, nep-evo, nep-exp, nep-hpe and nep-upt
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:5667

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