Journal Article

No. 2014-18 | April 04, 2014
Aggregate Effects of Behavioral Anomalies: A New Research Area PDF Icon
(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

Citation

Bruno S. Frey and Jana Gallus (2014). Aggregate Effects of Behavioral Anomalies: A New Research Area. Economics: The Open-Access, Open-Assessment E-Journal, 8 (2014-18): 1—15. http://dx.doi.org/10.5018/economics-ejournal.ja.2014-18

Assessment

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