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Journal of Risk and Uncertainty

, Volume 16, Issue 1, pp 7–47 | Cite as

Amos Tversky and the Ascent of Behavioral Economics

  • David Laibson
  • Richard Zeckhauser
Article

Abstract

Amos Tversky investigated and explained a wide range of phenomena that lead to anomalous human decisions. His two most significant contributions, both written with Daniel Kahneman, are the decision-making heuristics—representativeness, availability, and anchoring—and prospect theory. Tversky's concepts have broadly influenced the social sciences. In economics, they gave rise to the burgeoning field of behavioral economics. This field, skeptical of perfect rationality, emphasizes validation of modeling assumptions, integration of micro-level data on decisions (including experimental evidence), and adoption of lessons from psychology. Tversky's contributions are reviewed, assessed using citation analysis, and placed in historical context. Fertile areas for behavioral economics research are identified.

Behavioral economics decision theory heuristics and biases prospect theory psychology and economics rationality 

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Copyright information

© Kluwer Academic Publishers 1998

Authors and Affiliations

  • David Laibson
    • 1
    • 2
  • Richard Zeckhauser
    • 3
    • 2
  1. 1.Department of EconomicsHarvard UniversityCambridge
  2. 2.The National Bureau of Economic ResearchUSA
  3. 3.Kennedy School of GovernmentHarvard UniversityCambridge

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