Behavioral Economics

Höfundur: Edward Cartwright (Útgáfa: 4)
Behavioral Economics

Kaup valmöguleikar

Over the last few decades behavioral economics has revolutionized the discipline. It has done so by putting the human back into economics, by recognizing that people sometimes make mistakes, care about others and are generally not as cold and calculating as economists have traditionally assumed. The results have been exciting and fascinating, and have fundamentally changed the way we look at economic behavior.

This textbook introduces all the key results and insights of behavioral economics to a student audience. Ideas such as mental accounting, prospect theory, present bias, inequality aversion and learning are explained in detail. These ideas are also applied in diverse settings, such as auctions, stock market crashes, charitable donations and health care, to show why behavioral economics is crucial to understanding the world around us.

Consideration is also given to what makes people happy, and how we can potentially nudge people to be happier. This new edition contains expanded and updated coverage of several topics and applications, including fraud and cybercrime, cryptocurrency, public health messaging, and the COVID-19 pandemic. The companion website is also updated with a range of new questions and worked examples. This book remains the ideal introduction to behavioral economics for advanced undergraduate and graduate students.

Nánar um bókina

Útgefandi
Taylor & Francis
ISBN
9781003804703
Print ISBN
9781032414102
Format
ePub
Útgáfa
4
Höfundar
Edward Cartwright
Tungumál
English
Útgefið
2024-01-22
Prent takmörkun á líftíma
100
Prent takmörkun
2
Afritunar takmörkun
2

Kaflar

  • Cover
  • Half Title
  • Series
  • Title
  • Copyright
  • Dedication
  • Contents
  • Detailed contents
  • List of figures
  • List of tables
  • List of research methods boxes
  • About the author
  • Preface
  • Part I Introduction
  • 1 An introduction to behavioral economics
  • 1.1 The history and controversies of behavioral economics
  • 1.1.1 Behavioral economics is reborn
  • 1.1.2 Behavioral economics and policy
  • 1.1.3 The different faces of behavioral economics
  • 1.1.4 Debate and controversy
  • 1.1.5 Too far or not far enough
  • 1.2 Some background on behavioral economics methods
  • 1.2.1 Some background on experiments
  • 1.2.2 Some background on theory
  • 1.2.3 Some background on field studies and experimetrics
  • 1.3 How to use this book
  • 1.3.1 Chapter previews
  • 1.3.2 Behavioral finance
  • 1.4 Further reading
  • 1.5 Review questions
  • Part II Economic behavior
  • 2 Simple heuristics for complex choices
  • 2.1 Utility and search
  • 2.1.1 How to search
  • 2.1.2 Choice arbitrariness
  • 2.2 Mental accounting and framing
  • 2.2.1 Reference-dependent utility
  • 2.2.2 The endowment effect
  • 2.2.3 Willingness to pay or accept
  • 2.2.4 Transaction utility
  • 2.2.5 Narrow framing
  • 2.2.6 Hedonic editing
  • 2.2.7 Choice bracketing
  • 2.3 The role of emotions
  • 2.3.1 Aversion to lying
  • 2.3.2 Deception
  • 2.3.3 Honesty and framing
  • 2.4 Summary
  • 2.5 Demand, supply and markets
  • 2.5.1 Double-auction markets in the lab
  • 2.5.2 Posted offer markets and market power
  • 2.5.3 The law of one price
  • 2.6 Labor supply and reference dependence
  • 2.6.1 A target income and target wage
  • 2.6.2 Taxicab drivers
  • 2.6.3 Female labor supply
  • 2.7 The housing market
  • 2.7.1 Reluctance to sell
  • 2.7.2 What are buyers willing to pay?
  • 2.8 The behavioral life cycle hypothesis
  • 2.8.1 Fungibility and mental accounting
  • 2.9 Saving for the future
  • 2.9.1 Let’s diversify
  • 2.9.2 Let’s not diversify
  • 2.10 Further reading
  • 2.11 Review questions
  • 3 Choice with risk
  • 3.1 Expected utility
  • 3.1.1 The Allais paradox
  • 3.1.2 Risk aversion
  • 3.1.3 Risk-loving for losses
  • 3.1.4 When expected utility will work
  • 3.2 Independence and fanning out
  • 3.2.1 Disappointment
  • 3.2.2 Rank-dependent expected utility
  • 3.3 Reference dependence and prospect theory
  • 3.3.1 Reference-dependent utility
  • 3.3.2 The reference point and expectations
  • 3.3.3 Combined gambles
  • 3.3.4 Stochastic reference point
  • 3.4 Preference reversals
  • 3.4.1 Procedural invariance
  • 3.4.2 Regret theory
  • 3.4.3 Prospect theory and preference reversals
  • 3.4.4 Why preference reversals matter
  • 3.5 Summary
  • 3.6 Financial trading
  • 3.6.1 The equity premium puzzle
  • 3.6.2 The disposition effect
  • 3.6.3 The ostrich effect
  • 3.7 Insurance
  • 3.8 Tax evasion
  • 3.8.1 Standard model of tax evasion
  • 3.8.2 Behavioral theories of tax evasion
  • 3.8.3 Taxes and reference points
  • 3.8.4 Tax evasion in the laboratory
  • 3.9 Legal settlements
  • 3.9.1 Fourfold pattern of risk attitudes
  • 3.9.2 Frivolous litigation
  • 3.10 Further reading
  • 3.11 Review questions
  • 4 Choosing when to act
  • 4.1 Exponential discounting
  • 4.1.1 The discount factor
  • 4.1.2 The utility of sequences
  • 4.2 Hyperbolic discounting
  • 4.2.1 Quasi-hyperbolic discounting
  • 4.2.2 The consequences of time inconsistency
  • 4.2.3 Temptation and self-control
  • 4.3 Loss aversion and sequences
  • 4.3.1 Reference dependence
  • 4.3.2 Preferences for sequences
  • 4.4 Time and risk
  • 4.5 Summary
  • 4.6 Borrowing and saving
  • 4.6.1 Saving equals growth or growth equals saving?
  • 4.6.2 Why save when you have debts?
  • 4.7 Firm pricing and membership fees
  • 4.7.1 Time inconsistency and consumer behavior
  • 4.7.2 Firm pricing
  • 4.7.3 Choosing the correct calling plan
  • 4.8 Fraud and cybercrime
  • 4.8.1 Social engineering and persuasion
  • 4.8.2 Time pressure, impulse and procrastination
  • 4.9 Environmental economics
  • 4.9.1 Inter-generational discount factor
  • 4.9.2 Reducing CO2 emissions
  • 4.10 Further reading
  • 4.11 Review questions
  • 5 Learning from new information
  • 5.1 Bayesian updating and choice with uncertainty
  • 5.1.1 Models of choice with uncertainty
  • 5.1.2 The Ellsberg paradox
  • 5.2 Two cognitive biases
  • 5.2.1 Confirmatory bias
  • 5.2.2 A model of confirmatory bias
  • 5.2.3 Law of small numbers
  • 5.2.4 A model of the law of small numbers
  • 5.2.5 Generating random sequences
  • 5.2.6 Do biases matter?
  • 5.3 Learning from others
  • 5.3.1 To conform or not
  • 5.3.2 Cascade experiments
  • 5.3.3 What happened to conformity?
  • 5.3.4 Signaling games
  • 5.4 Summary
  • 5.5 Health care
  • 5.5.1 Patients
  • 5.5.2 Practitioners
  • 5.5.3 Public health messaging
  • 5.6 Asset price bubble and crash
  • 5.6.1 Bubbles in the lab
  • 5.6.2 Experience and bubbles
  • 5.6.3 Explaining bubbles
  • 5.6.4 Cryptocurrency
  • 5.7 Voting in elections
  • 5.8 Further reading
  • 5.9 Review questions
  • 6 Interacting with others
  • 6.1 The beauty contest
  • 6.1.1 Strategy and Nash equilibrium
  • 6.1.2 Choice in a beauty contest
  • 6.1.3 Learning in a beauty contest
  • 6.2 Playing for the first time
  • 6.2.1 Level-k thinking
  • 6.2.2 Sophisticated beliefs
  • 6.2.3 Focal points
  • 6.2.4 Equilibrium refinement
  • 6.2.5 Nash equilibrium with mistakes
  • 6.3 Learning from experience
  • 6.3.1 Reinforcement learning
  • 6.3.2 Belief-based learning
  • 6.3.3 Experience-weighted learning
  • 6.3.4 Learning and prediction
  • 6.4 Teams make decisions
  • 6.4.1 Teams and the beauty contest
  • 6.4.2 The sophistication of teams
  • 6.4.3 Are teams smarter?
  • 6.5 Summary
  • 6.6 Auctions
  • 6.6.1 Revenue equivalence
  • 6.6.2 Winner’s curse
  • 6.7 Learning to coordinate
  • 6.7.1 Weakest link games
  • 6.7.2 Threshold public good games
  • 6.7.3 Coordinating on networks
  • 6.8 Monetary policy by committee
  • 6.9 Industrial organization
  • 6.9.1 Limit pricing
  • 6.9.2 Market entry
  • 6.9.3 Quantity leadership
  • 6.10 Further reading
  • 6.11 Review questions
  • 7 Social preferences
  • 7.1 The experimental evidence for social preferences
  • 7.1.1 The nice side of social preferences
  • 7.1.2 The nasty side of social preferences
  • 7.1.3 Reciprocity
  • 7.1.4 Fairness and competition
  • 7.1.5 The terminology of reciprocity
  • 7.1.6 Social preferences and teams
  • 7.2 Inequality aversion
  • 7.2.1 Inequality aversion with incomplete information
  • 7.2.2 Inequality aversion with complete information
  • 7.2.3 An evaluation of inequality aversion models
  • 7.3 Intentions and social norms
  • 7.3.1 A model of fairness based on intentions
  • 7.3.2 What is fair?
  • 7.4 Summary
  • 7.5 Giving to charity
  • 7.5.1 Crowding out
  • 7.5.2 Who is watching?
  • 7.5.3 Why do people give?
  • 7.5.4 Social norms and crowding out
  • 7.6 Price and wage rigidity
  • 7.6.1 A model of worker reciprocity
  • 7.6.2 Wage stickiness in the lab
  • 7.6.3 How long to forget a wage change?
  • 7.6.4 Firm pricing
  • 7.7 Contract theory
  • 7.7.1 Contracts for loss-averse workers
  • 7.7.2 Exploitation of an overconfident worker
  • 7.8 Further reading
  • 7.9 Review questions
  • Part III Origins of behavior
  • 8 Evolution and culture
  • 8.1 Evolution and economic behavior
  • 8.1.1 Looking for food and finding a utility function
  • 8.1.2 Choosing when to have children
  • 8.1.3 Aggregate risk
  • 8.1.4 Competing with others
  • 8.2 Culture and multi-level selection
  • 8.2.1 Cross-culture comparisons
  • 8.2.2 Group selection
  • 8.2.3 Gene–culture coevolution
  • 8.2.4 Reciprocity in children and chimpanzees
  • 8.3 Summary
  • 8.4 The gender gap
  • 8.4.1 Attitudes to risk
  • 8.4.2 Attitudes to competition
  • 8.4.3 Social preferences
  • 8.4.4 Why are men and women different?
  • 8.5 The economics of family
  • 8.6 Development economics
  • 8.6.1 The education production function
  • 8.6.2 Microfinance
  • 8.7 Further reading
  • 8.8 Review questions
  • 9 Neuroeconomics
  • 9.1 An introduction to the brain
  • 9.1.1 An economist’s map of the brain
  • 9.1.2 Brain processes
  • 9.1.3 Executive control systems
  • 9.1.4 Neurotransmitter and hormone
  • 9.2 Valuing rewards and learning
  • 9.2.1 Reward evaluation
  • 9.2.2 Learning about rewards
  • 9.2.3 Risk and uncertainty
  • 9.2.4 Different types of reward
  • 9.3 Making decisions
  • 9.3.1 Choice and strategy
  • 9.3.2 Framing effects
  • 9.3.3 Strategic behavior
  • 9.3.4 Fairness and norms
  • 9.3.5 Punishment and inequality aversion
  • 9.3.6 Present bias and a brain in conflict
  • 9.3.7 Multiple-self models
  • 9.4 Summary
  • 9.5 Addiction
  • 9.5.1 A model of rational addiction
  • 9.5.2 Biases and addiction
  • 9.5.3 Cues and addiction
  • 9.5.4 Addiction and neuroscience
  • 9.6 Further reading
  • 9.7 Review questions
  • Part IV Welfare and policy
  • 10 Happiness and utility
  • 10.1 What makes us happy?
  • 10.1.1 Happiness is relative
  • 10.1.2 Adaption and habituation
  • 10.2 Do we know what makes us happy?
  • 10.2.1 Remembered utility
  • 10.2.2 Projection bias
  • 10.3 Choice and commitment
  • 10.3.1 Does present bias matter?
  • 10.3.2 Pre-commitment
  • 10.3.3 Do people like having choice?
  • 10.4 Summary
  • 10.5 Health and happiness
  • 10.5.1 Measuring the value of treatment
  • 10.5.2 Improving the remembered utility of treatment
  • 10.6 Mental health and life satisfaction
  • 10.7 Saving and retirement
  • 10.7.1 Projection bias in saving
  • 10.7.2 Investor autonomy
  • 10.8 Welfare trade-offs
  • 10.8.1 The inflation–unemployment trade-off
  • 10.8.2 Tax saliency
  • 10.9 Further reading
  • 10.10 Review questions
  • 11 Policy and behavior
  • 11.1 Designing good institutions
  • 11.1.1 The tragedy of the commons
  • 11.1.2 Matching markets
  • 11.1.3 Spectrum auctions
  • 11.1.4 Behavioral economics and institution design
  • 11.2 Nudge and behavior change
  • 11.2.1 Savings accounts
  • 11.2.2 A default to save
  • 11.2.3 Nudge
  • 11.2.4 Nudge and behavior change
  • 11.2.5 Consumer protection, health and the environment
  • 11.3 Summary
  • 11.4 Further reading
  • 11.5 Review questions
  • Bibliography
  • Index