Lettera Matematica

, Volume 6, Issue 1, pp 13–17 | Cite as

Behavioural economics and mathematics: chronicles of an alliance

  • Fabio Tramontana


The recent Nobel Prize for economic sciences assigned to Richard H. Thaler highlights the growing importance of behavioural economics in explaining the actions of economic agents. This interdisciplinary branch of economics adopts methods and tools from other social sciences such a psychology and sociology. Nevertheless, the success of behavioural economics does not imply that economics should dismiss the mathematical formalisation of their models. The failure of the neoclassical approach is a consequences of the unrealistic assumptions concerning the decision making of economic agents, and not due to their mathematical formalisation. In this article we explore how different mathematical tools are perfectly compatible with the assumptions coming from behavioural economics and how they can be quite useful to explain stylised facts and make good forecasts.


Behavioural economics Prospect theory Mathematical methods Dynamical systems 


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Copyright information

© Centro P.RI.ST.EM, Università Commerciale Luigi Bocconi 2018

Authors and Affiliations

  1. 1.Department of of Mathematical Sciences, Mathematical Finance and EconometricsCatholic University of MilanoMilanItaly

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