Behavioral Economics and Institutional Innovation

Robert J. Shiller ()

No 1499, Cowles Foundation Discussion Papers from Cowles Foundation, Yale University

Abstract: Behavioral economics has played a fundamental role historically in innovation in economic institutions, even long before behavioral economics was recognized as a discipline. Examples from history, notably that of the invention of workers’ compensation, illustrate this point. Though scholarly discussion develops over decades, actual innovation tends to occur episodically, particularly at times of economic crisis. Fortunately, some of the major professional societies, the Verein fur Sozialpolitik, the American Economic Association and their successors, have managed to keep a broad discourse going, involving a variety of research methods including some that may be described today as behavioral economics, thereby maintaining an environment friendly to institutional innovation. Further, the broad expansion of behavioral economics that is going on today can be expected to yield even more such important institutional innovations.

Keywords: Economic innovation; Invention; Psychological economics; Institutional economics; Social insurance; Workers’ compensation; American Economic Association; Germany; Verein fur Sozialpolitik (search for similar items in EconPapers)
JEL-codes: B41 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-cbe, nep-evo, nep-hpe and nep-pke
Date: 2005-01
Note: CFP 1150.
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Published in Southern Economic Journal (2005), 72(2): 269-283

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