Abstract
Behavioral economics comes out as a new program of economic research which criticizes the unrealism of the neoclassical paradigm and aims at a more realistic analysis of economic behaviors, and in particular of the decision-making processes. The criticisms toward neoclassical economics are focused on the assumptions about homo oeconomicus, and in particular on the postulate of full rationality. Starting in the 1950s, theoretical and empirical analysis was used to argue that real subjects have a kind of rationality different to that adopted in economic models. The result was the idea of bounded rationality — illustrated by Herbert Simon — which describes the cognitive, mnemonic and computational limits of human rationality, underpinning that they are neglected by neoclassical economics. Another related result was the criticism of exnected utility theory and. more generallv. of rational choice.
This is a preview of subscription content, log in via an institution to check access.
Access this chapter
Tax calculation will be finalised at checkout
Purchases are for personal use only
Preview
Unable to display preview. Download preview PDF.
References
Akerlof G. A. (1970), “The Market for ‘Lemons’: Quality Uncertainty and the Market Mechanism” The Quarterly Journal of Economics, 84(3): 488–500
Akerlof G. and A. Stiglitz J. (1987), “The Causes and Consequences of the Dependence of Quality on Price” Journal of Economic Literature, 25: 1–48
Allais M. (1953), “Le comportment de l’homme rationnel devant le risque: critique des postulats et axiomes de l’école americaine”, Econometrica, 21: 503–546
Augier M (2003), “The Making of a Behavioural Economist: Herbert A. Simon and the Early Revolution of Bounded Rationality” in Rizzello S. (ed.) (2003), Cognitive Developments in Economics, Routledge, London, pp. 133–157
Berg N. (2003), Normative Behavioral Economics” Journal of Socio-Economics, 32: 411–427
Berg N. and Gigerenzer G. (2010), “As-if Behavioral Economics: Neoclassical Economics in Disguise?” History of Economic Ideas, 18(1): 133–165
Caldwell B. J. (1986), “Behavioral Economics: An Interpretative History” in Gilad B. and Kaish S. (eds.), pp. 5–17
Camerer C. F. and Loewenstein G. (2004), “Behavioral Economics: Past, Present, Future” in Camerer, Loewenstein e Rabin (eds.), Advances in Behavioral Economics, Princeton, Princeton University Press, pp. 3–51
Doherty M. E. and Balzer W. K. (1988), “Cognitive Feedback” in Brehmer B., Joyce C.R.B. (eds.) (1988), Human Judgment, Amsterdam, Elsevier Science Publisher, pp. 163–198
Earl P. E. (1988), “Introduction” in Earl P. E. (ed.). Behavioural Economics. Brookfield: Edward Elgar, pp. 1–16.
Eatwell J., Milgate M. and Newman P. (eds.) (1987), The New Palgrave: A Dictionary of Economics, London, Macmillan
Ellsberg D. (1961), “Risk, Ambiguity, and the Savage Axioms” Quarterly Journal of Economics, 75: 643–669
Gilad B. and Kaish, S. (eds.) (1986), Handbook of Behavioral Economics, vols. A and B, London, JAI Press Inc
Gilad B., Kaish S. and Loeb P. D. (1984), “From Economic Behavior to Behavioral Economics: The Behavioral Uprising in Economics,” Journal of Behavioral Economics, 13: 1–22
Friedman M. (1953), Essays in Positive Economics, Chicago, The University Press
Hayek F. A. (1937), “Economics and Knowledge” Economica, 4(13): 96–105
Hayek F. A. (1945), “The Use of Knowledge in Society” American Economic Review, 35 (4), 519–530
Hayek F. A. (1952), The Sensory Order. An Inquiry into the Foundations of Theoretical Psychology, London, Routledge & Kegan Paul
Loasby B. J. (2004), “Hayek Theory of the Mind” in Koppl R. (ed.), Evolutionary Psychology and Economic Theory, vol 7 of Advances in Austrian Economics, Amsterdam, JAI, 2004, pp. 101–134
Loasby B. J. (2007), “Hayek’s Challenge to Economists” SCEME Working Papers, Advances in Economic Methodology 016/2007
Markowitz H. (1952), “The Utility of Wealth” Journal of Political Economy, 60:151–158
Rizzello, S. (1997), L’economia della mente, Roma, Laterza, eng. tr. The Economics of the Mind, Edward Elgar, Aldershot, 1999
Rizzello S. and Spada A. (2012), “The Knowledge-Rationality Connection in Herbert Simon,” in Arena R., Festré A. (eds.), Handbook of Knowledge and Economics, Edward Elgar. pp. 144–164
Sent, E-M. (2004) “Behavioral Economics: How Psychology Made Its (Limited) Way back Into Economics,” History of Political Economy, 36 (4): 735–760
Simon H. A. (1947), Administrative Behavior, New York, Macmillan
Simon H. A. (1976), “From Substantive to Procedural Rationality” in Latsis S. (ed.) (1976), Method and Appraisal in Economics, Cambridge, Cambridge University Press
Simon H. A. (1978), “Rationality as a Process and as a Product of Thought” American Economic Review, 68(2): 1–16
Simon H. A. (1982), Models of Bounded Rationality, Cambridge, The MIT Press
Simon H. A. (1986), “Rationality in Psychology and Economics” Journal of Business, 59 pp. 209–224
Simon H. A. (1987a), “Behavioral Economics” in Eatwell, Milgate and Newman (eds.) (1987), Vol. I: 221–225
Simon H. A. (1987b), “Satisficing” in Eatwell, Milgate e Newman (eds.) (1987), vol. IV: 243–245
Simon H. A. (1987c), “Bounded Rationality” in Eatwell, Milgate and Newman (eds.) (1987), Vol. I: 226–268
Simon H. A. (1989), “The State of Economic Science” in Sichel W. (ed.) (1989), The State of Economic Science: Views of Six Nobel Laureates, W. E. Upjohn Institute for Employment Research
Spada A. (2010), “La razionalità in Herbert Simon e le ambiguità tra behavioral economics ed economia cognitiva” Cesmep Working-papers, Università di Torino, 06/2010
Tomer J. F. (2007), “What is Behavioral Economics?” Journal of Socio-Economics, 36(3): 463–479
Editor information
Editors and Affiliations
Copyright information
© 2013 Salvatore Rizzello and Anna Spada
About this chapter
Cite this chapter
Rizzello, S., Spada, A. (2013). The Oversight of Behavioral Economics on Hayek’s Insights. In: Frantz, R., Leeson, R. (eds) Hayek and Behavioral Economics. Archival Insights into the Evolution of Economics Series. Palgrave Macmillan, London. https://doi.org/10.1057/9781137278159_13
Download citation
DOI: https://doi.org/10.1057/9781137278159_13
Publisher Name: Palgrave Macmillan, London
Print ISBN: 978-1-349-33683-8
Online ISBN: 978-1-137-27815-9
eBook Packages: Palgrave Economics & Finance CollectionEconomics and Finance (R0)