The theory of choice in behavioral economics

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Ivane Javakhishvili Tbilisi State University Press
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.
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.
Behavioral Economics; The Theory of Choice; Mental accounting system; Nudging; Save more tomorrow; Libertarian Paternalism
III International Scientific Conference: "Challenges of Globalization in Economics and Business", Tbilisi, 2018, pp. 536-541