The theory of choice in behavioral economics
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Date
2018
Authors
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Journal ISSN
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Publisher
Ivane Javakhishvili Tbilisi State University Press
Abstract
The article discusses the essence of Behavioral Economics, which is integration of Economics and Psychology, it discusses how people think and act when making economic decisions, it learns three basic characteristics of economic analyses: limited rationality, perceptions about fairness, and lack of self-control, analyzes mental accounting system, role of Nudging, pension plan: Save More Tomorrow, Libertarian Paternalism, and finally, it supports by evidence the necessity of using behavioral economic approaches and principles when doing economic analyses in the process of defining economic policy.
Description
1. Simon, Herbert A. 1987. “Behavioural economics.” The New Palgrave: A dictionary of Economics 1: 221-34.
2. Thaler, Richard H. 2015. Misbehaving: The Making of Behavioral Economics. New York: W.W. Norton&Company.
3. Thaler, Richard H. 2004. “Save More Tomorrow: Using Behavioral Economics to Increase Employee Saving.” Journal of Political Economy 112(1):S164-87.
4. Thaler, Richard H., and Cas R. Sunstein.2008. Nudge: Improving Decision about Health, Wealth and Happiness. London: Penguin.
Keywords
Behavioral Economics; The Theory of Choice; Mental accounting system; Nudging; Save more tomorrow; Libertarian Paternalism
Citation
III International Scientific Conference: "Challenges of Globalization in Economics and Business", Tbilisi, 2018, pp. 536-541