Discussion Paper

No. 2013-51 | September 25, 2013
Aggregate Effects of Behavioral Anomalies: A New Research Area
(Published in Special Issue Economics, Psychology and Choice Theory)

Abstract

Much recent research in economics focuses on exploring behavioral anomalies, i.e., systematic deviations from the assumptions of the rationally self-interested model of man. Laboratory studies are used to identify seeming inconsistencies with micro-economic theory on the level of individuals. Since economics is a social science, this article proposes that the next crucial step consists in shifting the focus to the macro-level. It examines the process through which behavioral anomalies are aggregated to a societal outcome. Since individuals are reactive when they interact with others and face institutional constraints, the aggregation process may lead to different outcomes than what has been observed in individual-level studies: the respective anomalies may disappear, or they may become stronger on the macro-level. The discussion demonstrates that there are a great number of aspects to be analyzed. The paper presents fragments of what could become a more extensive field of research.

JEL Classification

A10 B00 D70

Cite As

Bruno S. Frey and Jana Gallus (2013). Aggregate Effects of Behavioral Anomalies: A New Research Area. Economics Discussion Papers, No 2013-51, Kiel Institute for the World Economy. http://www.economics-ejournal.org/economics/discussionpapers/2013-51

Assessment



Comments and Questions


Yury Maksimenko - recommend
September 26, 2013 - 08:39

Human conception of economic situation is the core of all economic decisions.


Anonymous - Referee report 1
November 25, 2013 - 08:48

see attached file


Erik Angner, George Mason University - Referee report 2
November 28, 2013 - 09:22

see attached file