Behavioural Economics: Classical and Modern

Ying-Fang Kao and K. Vela Velupillai

No 1126, ASSRU Discussion Papers from ASSRU - Algorithmic Social Science Research Unit

Abstract: In this paper, the origins and development of behavioural economics, beginning with the pioneering works of Herbert Simon (1953) and Ward Edwards (1954), is traced, described and (critically) discussed, in some detail. Two kinds of behavioural economics – classical and modern – are attributed, respectively, to the two pioneers. The mathematical foundations of classical behavioural economics is identified, largely, to be in the theory of computation and computational complexity; the corresponding mathematical basis for modern behavioural economics is, on the other hand, claimed to be a notion of subjective probability (at least at its origins in the works of Ward Edwards). The economic theories of behavior, challenging various aspects of 'orthodox' theory, were decisively influenced by these two mathematical underpinnings of the two theories

Keywords: Classical Behavioural Economics; Modern Behavioural Economics; Subjective Probability; Model of Computation; Computational Complexity. Subjective Expected Utility (search for similar items in EconPapers)
JEL-codes: C61 C63 D03 D81 D83 (search for similar items in EconPapers)
Date: 2011
New Economics Papers: this item is included in nep-cbe, nep-evo, nep-his, nep-hme, nep-hpe and nep-upt
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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