Human Behavior

Billions living in insecurity and injustice is hardly a rational system.

Author and law professor Maurice Stucke explains why the practices of Google, Amazon, Facebook, and Apple are so dangerous and what’s really required to rein them in. Hint: Current proposals are unlikely to work.

The neoliberal economy was supposed to bring about a utopian world order. Instead, it gave us crippling psychological stress and social breakdown. How can we ever recover?

A tractable formalization of the Knightian uncertainty faced by an economist and market participants in an intertemporal asset-price model.

The work of feminist thinkers helps illuminate why billionaires seek to solve problems on Earth by blasting into space.

As a pandemic continues to expose weaknesses in our human systems and institutions, psychiatrist and author Iain McGilchrist’s proposition that a battle in our heads is impacting the direction of our future is worth revisiting.

Researchers worry the pandemic may have severe after-effects, with deaths of despair impacting more distressed and newly-vulnerable populations

Even if psychological factors influence participants’ decision-making, as behavioral economists compellingly argue, incorporating such factors into economic theory would seem to require that market participants adhere to elementary logical rules.

Economists have gone to great lengths to write humans out of economics, pushing self-interest and generally providing two choices—faith in markets or the state.

Jonathan Haidt deploys insights from moral psychology to help us see ourselves and each other more clearly

Trying to predict the financial future is a fool’s errand, even for a genius

Author Jeremy Lent argues that western conceptual frameworks with roots in the Stone Age push us towards disaster. Time to let them go?

Author Supritha Rajan argues that self-interested competition may be the official line, but it’s far from the whole story

Economics is often thought of as emotion-less, but Daniel Benjamin argues for happiness as a vital indicator

To understand behavior and choice, we need to borrow from not just cognitive science but also sociology.

Asset markets are indispensable in harnessing society’s diverse views and insights about future business performance. But those views are shaped as much by emotion and crowd mentality as by rational expectations.

Asset markets are indispensable in harnessing society’s diverse views and insights about future business performance. But those views are shaped as much by emotion and crowd mentality as by rational expectations.

The World Economic Roundtable seeks to help the business, investment, and policy communities understand ongoing changes in the world economy and to promote a discussion of ideas that can advance the goal of a widely shared global prosperity.

Xavier Gabaix argues that public policies should prioritize alleviating deprivation at the bottom over narrowing the rich-poor gap 

If standard economic theory can’t explain a traffic jam, how can it cope with crises?

A transition from the conventional policy of “redistributing income” to “redistributing membership”, could promote economic integration across communities and intergenerational mobility.

Behavioral finance views stock-market investors’ expectations as largely unrelated to fundamental factors. Relying on survey data, this paper presents econometric evidence that fundamentals are a major driver of investors’ expectations.

This research project formulates a new model of bounded rationality, based on the idea that agents will keep a simple, or “sparse,” model of the world.

How much does the standard theory of externalities and public goods really say?

This essay critically evaluates the benefits and costs of the dominant methodology in macroeconomics, the DSGE approach. Although the approach has led to great progress in some areas, it has also created biases and blind spots in the profession that hold back our understanding and our ability to govern the macroeconomy. There is great scope for progress in macroeconomics by judiciously pushing the boundaries of some of the methodological restrictions imposed by the DSGE approach.

The reality of human homeostasis expands the views on preferences and rational choice that are part of traditionally conceived Homo economicus and casts doubts on economic models that depend only on an “invisible hand” mechanism.

Tania Singer on the key importance of understanding preferences and behavioral change.

The financial crisis of 2008 was unforeseen to a significant extent. One reason is that the dominant academic theories influencing political decision makers ignore recent advances and instead rely largely on models and decision science dating back to the Second World War.

John Muth proposed the Rational Expectations Hypothesis (REH) to represent how the market (an aggregate of its participants) understands and forecasts outcomes. REH imposes internal consistency between the market’s forecasts and “the relevant economic theory” (Muth 1961, p. 316).

The largely unexpected arrival of the global economic crisis and the largely unpredicted slowness of the recovery from the Great Recession should be precipitating an intellectual crisis across economics and policy making. We require additional theories and additional methods to detect how an economy is evolving and to provide the basis for policy intervention (Haldane, 2014).

The central concepts of Keynes’ macroeconomic theories concerning the behavior of labor markets, aggregate demand, and asset pricing can be formulated as special cases of a general social interaction model.

Caring Economics is about a new way of thinking about human prosperity. In mainstream economics, prosperity is a matter of consumption, income and wealth. By contrast, Caring Economics conceives of prosperity in terms of deeper sources of durable human wellbeing.

The SSGAC is a research infrastructure designed to stimulate dialogue and cooperation between medical researchers and social scientists. The SSGAC facilitates collaborative research that seeks to identify associations between specific genetic markers (segments of DNA) and behavioral traits, such as preferences, personality and social-science outcomes.

Behavior genetics is the study of the relationship between genetic variation and psychological traits. Turkheimer (2000) proposed “Three Laws of Behavior Genetics” based on empirical regularities observed in studies of twins and other kinships. On the basis of molecular studies that have measured DNA variation directly, we propose a Fourth Law of Behavior Genetics: “A typical human behavioral trait is associated with very many genetic variants, each of which accounts for a very small percentage of the behavioral variability.”

It is impossible to ignore material inequality. Wealth, and the goods that come with it, are accumulating at the top of society while others seem to be struggling in the middle and bottom.

This research project develops tools that allow social scientists to understand how and when social factors, such as peer influences, role models, or norms, affect individual choices.

This research project explores how genomic data can inform the understanding of social science questions. The genomic revolution means that social scientists are able to correlate a range of outcomes and behaviors with genes. This research studies what these correlations mean.

A more realistic version of how people “maximize utility”

Our welfare depends not only on our actual consumption, but also on alternate choices wedid not make.

In recent decades, market values have crowded out non- market norms in almost every aspect of life—medicine, education, government, law, art, sports, even family life and personal relations. Without quite realizing it, we have drifted from having a market economy to being a market society. Is this where we want to be?

This research project studies the pricing and liquidity implications of sentiment and disagreement as origins of radical uncertainty in financial markets.

“You are now leaving the world as you know it.”

Changing the incentives for how economists determine both the content of the subject and their approach to scientific research could increase the range of thinking in the profession

A genome-wide association study (GWAS) of educational attainment was conducted in a discovery sample of 101,069 individuals and a replication sample of 25,490. Three independent single-nucleotide polymorphisms (SNPs) are genome-wide significant (rs9320913, rs11584700, rs4851266), and all three replicate.

At the heart of economics is a theory of action. It reflects views about how human beings make economic decisions and leads to an analysis of aggregate consequences.

Neoclassical economics has abolished the role of psychology in decision making by assuming that all individuals are rational optimizers with rational expectations about future events.

In “The Ambivalence of Scarcity” which is my contribution to L’Enfer des choses. René Girard et la logique de l’économie, written by Jean-Pierre Dupuy and originally published in French in 1978, I attempt to apply mimetic theory to modern economics and to economicphenomena, and also to explain why economic issues and economics as a discipline occupy such an important place in the modern world.

A striking feature of the neoclassical economic theory which has been dominant in Western universities in recent years is that it has had so little to say about innovation and innovation policy which is useful for policy-makers.

It would be nonsensical to blame economists for not foreseeing the crisis; even less for causing it. It was obvious there would be a crisis. It was impossible to foresee how it would start and evolve, and at what moment these events would occur.

The problem of value has always occupied a central place in economic thought and debate.

This research project explores ways to influence policy, starting with selected UK regulators, pension funds, and asset management groups, by testing the feasibility of “emotional finance” solutions to the prevention of future financial crises.

The human brain relies on three devices for its decisions: emotion controls; addictive learning; and intellectual processing. Understanding the conditions under which the three devices are engaged is essential for conscious decision-making.