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The Road Not Taken: How Psychology Was Removed from Economics, and How it Might Be Brought Back

28 Pages Posted: 19 Jan 2007  

Luigino Bruni

Università degli Studi di Milano-Bicocca - Center for Interdisciplinary Studies in Economics, Psychology & Social Sciences (CISEPS); Università degli Studi di Milano-Bicocca - Department of Economics, Quantitative Methods and Business Strategies (DEMS)

Robert Sugden

University of East Anglia - School of Economics

Abstract

This article explores parallels between the debate prompted by Pareto's reformulation of choice theory at the beginning of the twentieth century and current controversies about the status of behavioural economics. Before Pareto's reformulation, neoclassical economics was based on theoretical and experimental psychology, as behavioural economics now is. Current 'discovered preference' defences of rational-choice theory echo arguments made by Pareto. Both treat economics as a separate science of rational choice, independent of psychology. Both confront two fundamental problems: to find a defensible definition of the domain of economics, and to justify the assumption that preferences are consistent and stable.

Suggested Citation

Bruni, Luigino and Sugden, Robert, The Road Not Taken: How Psychology Was Removed from Economics, and How it Might Be Brought Back. Economic Journal, Vol. 117, No. 516, pp. 146-173, January 2007. Available at SSRN: https://ssrn.com/abstract=958120 or http://dx.doi.org/10.1111/j.1468-0297.2007.02005.x

Luigino Bruni (Contact Author)

Università degli Studi di Milano-Bicocca - Center for Interdisciplinary Studies in Economics, Psychology & Social Sciences (CISEPS) ( email )

Piazza dell'Ateneo Nuovo, 1
Milano, 20126
Italy

Università degli Studi di Milano-Bicocca - Department of Economics, Quantitative Methods and Business Strategies (DEMS) ( email )

Piazza dell'Ateneo Nuovo, 1
Milan, 20126
Italy

Robert Sugden

University of East Anglia - School of Economics ( email )

Norwich, Norfolk NR4 7TJ
United Kingdom
+44 (0) 1603 593423 (Phone)

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