Making Decisions: Lessons from Behavioural Economics

Gary Magee and Wayne Geerling

Chapter Chapter 2 in Socialism with a Human Face, 2022, pp 19-57 from Palgrave Macmillan

Abstract: Abstract This chapter provides a brief overview of some of the key findings of behavioural economics. Particular attention is devoted to the question of how decisions are made and implemented in complex systems, such as planned economies. The main goal of the chapter is to introduce the concepts and terminology used in subsequent chapters. The topics discussed include inter alia prospect theory, loss aversion, the possibility effect, the certainty effect, framing, mental accounting, and information cascades. These concepts are contrasted with those generated by expected utility theory, the approach more traditionally applied to decision making in economics and economic history. The implications of these differences for our understanding of behaviour within a command economy are considered.

Keywords: Prospect theory; Information cascades; Decision-making; Planned economies; East Germany (search for similar items in EconPapers)
Date: 2022
References: Add references at CitEc
Citations:

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:pal:palscp:978-981-19-0664-0_2

Ordering information: This item can be ordered from
http://www.palgrave.com/9789811906640

DOI: 10.1007/978-981-19-0664-0_2

Access Statistics for this chapter

More chapters in Palgrave Studies in Economic History from Palgrave Macmillan
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().