search query: @author Rabin, M. / total: 5
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| Author: | Rabin, M. |
| Title: | Psychology and economics. |
| Journal: | Journal of Economic Literature
1998 : MAR, VOL. 36:1, p. 11-46 |
| Index terms: | PSYCHOLOGY ADMINISTRATION ECONOMICS |
| Language: | eng |
| Abstract: | This essay discusses a selection of psychological findings relevant to economics. Economics has conventionally assumed that each individual has stable and coherent preferences. Psychological research suggests various modifications to this conception of human choice. Tabin bigins by discussing research which suggests that a person's preferences are often determined by changes in outcomes relative to her reference level, and not merely by absolute levels of outcomes. Then he discusses how people depart from pure self-interest to pursue "other-regarding" goals such as fairness, reciprocal altruism, and revenge, reviews evidence that requires relatively small modifications of the familiar economic framework. In the following section he reviews research on biases in judgement under uncertainty. Last he concludes a discussion of self-control problems and other phenomena that arise because people have a short-run propensity to pursue immediate gratification that is inconsistent with their long-run preferences. |
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