Tuesday, June 03, 2008

Gary Becker Meets Behavioral Economics

Yes, I suspect that psychology might have some potential use in economics (frankly, I have only read one book on behavioral economics, though I plan to also read Nudge and Sway).

But I am also puzzled by how behavioral economists would respond to Gary Becker's 1962 piece Irrational Behavior and Economic Theory, appeared in Journal of Political Economy, the purpose of which, in Becker's own words is to "show how the important theorems of modern economics result from a general principle which not only includes rational behavior and survivor arguments as special cases, but also much irrational behavior." (my emphasis).

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