Methodological challenges in Behavioural Economics: Towards a more holistic and empirically rooted economic science

Morris Altman (morris.altman@usask.ca)

Journal of Behavioral Economics for Policy, 2021, vol. 5, issue S3, 19-33

Abstract: This paper is a methodological one that addresses some of the shortcomings with contemporary behavioural economics, pioneered by Kahneman and Tversky. The latter relates to the heuristics and biases narrative that focuses on day-to-day choice behavior and individuals persistently deviating from neoclassical computationally intensive decision-making norms. I place this approach in the context of other alternative and sometimes complimentary perspectives on behavioural economics inclusive the fast and frugal approach and Simon's bounded rationality narrative. I argue for a more holistic empirical grounded behavioural economics that is more focused on better understanding the decision-making environment and individuals' decision-making capabilities and preferences that drive real work decision-making. This approach taps into the contributions of pioneers of behavioural economics and also compliments price theory and revises but does not abandon the notion of smart or intelligent decision-makers. It also allows for better understanding how individual freedom and empowerment is critical to optimal and welfare improving decision-making. Better understanding the over-arching decision-making environment can help fill the gaps in the choice literature with important implications for economic prediction and public policy.

Keywords: behavioral economics; bounded rationality; heuristics; and biases; errors; institutional; asymmetric information; economic theory (search for similar items in EconPapers)
JEL-codes: B41 B5 D8 D90 (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://sabeconomics.org/journal/RePEc/beh/JBEPv1/articles/JBEP-5-S3-2.pdf (application/pdf)

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:beh:jbepv1:v:5:y:2021:i:s3:p:19-33

Access Statistics for this article

Journal of Behavioral Economics for Policy is currently edited by Michelle Baddeley

More articles in Journal of Behavioral Economics for Policy from Society for the Advancement of Behavioral Economics (SABE) Contact information at EDIRC.
Bibliographic data for series maintained by SABE (journal@sabeconomics.org).