On the psychological basis of economics and social psychology

Thomas Chamberlain ()

ERSA conference papers from European Regional Science Association

Abstract: Neoclassical economic theory, with its roots (partly) in the marginal revolution of the Nineteenth Century, has been the dominant paradigm for economic thought throughout most of the Twentieth Century?up to the present day. However, for the past several decades economists have been deeply divided on the validity of neoclassical theory, thereby rendering the discipline less effective than it could be in helping to understand socio-economic change. A mathematical synthesis of prominent contributions to psychological and economic theory since the mid-Nineteenth Century has emerged in recent years, resulting in a substantive formulation of individual behavior. Rather than incorrectly assign utility directly to consumables thereby excluding time as an essential parameter, as is the case in mainstream economic theory, this new methodology assigns instantaneous utility exclusively to the expected (intertemporal) process-of-knowing attending mental/physical activity. The result is a canonical theory that represents the expectational and?barring surprise?actual time-dependent interaction of the individual with his environment, including other agents. The paper will provide an overview of basic and applied theory, and its relation to the mainstream and Austrian schools. Applications at the microeconomic level, including the psychological contribution to the real interest rate and the essential relationship between capital and labor, will be addressed. Also discussed will be the initial perceptions yielded by this new mathematical theory on the social psychology of group behavior, including the social-identity approach. New results will be provided on capital function, the etiology of interest rates, the nature of value, the determination of market prices, and other topics of interest.

Date: 1998-08
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
https://www-sre.wu.ac.at/ersa/ersaconfs/ersa98/papers/396.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:wiw:wiwrsa:ersa98p396

Access Statistics for this paper

More papers in ERSA conference papers from European Regional Science Association Welthandelsplatz 1, 1020 Vienna, Austria.
Bibliographic data for series maintained by Gunther Maier ().