At the Institute for Behavioral Economics, psychological insights come together with economic analysis, blending the disciplines’ strengths with sophisticated analytical tools.
The goal: to promote research and teaching in the field of behavioral economics and to expand the field through seminars and events.
Under the direction of Professor of Economics Martin Dufwenberg, the Institute of Behavioral Economics brings faculty, staff and students together to uncover fascinating new insights that are only possible when social scientists and economists work together.
About Behavioral Economics
It’s a merging of two worlds.
Traditionally, economics uses sophisticated mathematical and econometric methods, but relies on relatively simplistic assumptions about human nature. Meanwhile, by contrast, research in neighboring social sciences generally uses less sophisticated analytical methods while entertaining a richer description of man.
Behavioral economics (BE) combines the strengths of both. Here, we incorporate psychological insights into economic analysis, typically with continued use of sophisticated analytical tools.
BE has recently become the fastest growing field in economics—and one of the most exciting. It examines a wealth of evidence, often experimental, identifying empirical phenomena that are not adequately explained by traditional economic analysis. BE develops new models that incorporate emotions, fairness, reciprocity, social norms, bounded rationality and myopia, among others. The research often builds on game theory, which provides more flexible tools for this purpose than classical price theory or general equilibrium theory. BE is developed hand-in-hand by theorists and experimentalists, with many scholars having a foot in each camp.
BE is a portrait of the power in interdisciplinary work. Economists are informed by researchers in other fields, such as psychology, sociology, philosophy and the neurosciences. In return, BE offers analytical tools, models and modes of thinking that can enhance the research of scholars outside economics.