The rise of behavioral economics in the 21st century

Although the 2008 financial crisis had a major impact, not only on the global economy, but also on how some people now perceive the neoclassical school of economic thought and its economic analysis, there has also been a growing shift in economic theory in the countries. last decades.

The neoclassical economics remains one of the most popular schools of economic thought, but has also been emphasized in the central areas of the economy, such as macroeconomics, microeconomics, econometrics and mathematical or quantitative models.

Despite this institutional trend toward teaching micro and macroeconomic principles, there has been a growing interest in the field of behavioral economics and behavioral finance , which, in many ways, runs counter to the principles taught by neoclassical economists. .

Behavioral economics, as a field, roughly holds that:

• Individuals are not, in fact, rational economic agents , as the neoclassical school believes.
• Individuals cannot always adjust their decisions to take new information into account.
• Individuals are not always objective.

The economy behavior and behavioral finance, in particular attempt to account for particular phenomena of the market, as the interaction between human behavior and bubbles in the stock market, and opposes concepts such as the herd instinct and aversion to losses.

The discipline, while relatively new compared to some schools, has captured the attention of many, in part due to the fact that several prominent economists in this area, such as psychologist Daniel Kahneman and economist Richard Thaler, have received the Nobel Prize in economic Sciences.

Although behavioral economics is not without its naysayers, it is a growing field of economic development that illustrates how economics, as an academic subject, continues to evolve in our quest to truly understand what drives individuals and businesses, and how we better interact and exchange goods and services.

Whether you are a graduate, undergraduate or ESO student, if you want to know more about the introduction to behavioral economics or about the development of the history of economic thought, get in touch with a teacher who can help you.

Superprof has a wide variety of economics professors, each with their own specialties and areas of interest, from basic economics classes to statistical probability. You can search for a teacher in your area or take online classes. The rise of behavioral economics in the 21st century