Economics and Psychology: Imperialism or Inspiration?
27 Pages Posted: 5 Nov 2008 Last revised: 1 Dec 2008
Date Written: November 4, 2008
Economics and psychology are both sciences of human behaviour. This paper gives a survey of their interaction. First, the changing relationship between the two sciences is discussed: while economics was once imperialistic, it has become a science inspired by psychological insights. In order to illustrate this, recent developments and evidence for three major areas are presented: bounded rationality, non-selfish behaviour, and the economics of happiness.
Keywords: Economics and psychology, behavioral economics, social science paradigm
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