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The idea to publish a Handbook of Economic Psychology came up as a natural consequence of a discussion concerning appropriate reading material for.
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The Cambridge Handbook of Psychology and Economic Behaviour is a valuable reference dedicated to improving our understanding of the economic mind and economic behaviour.


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Employing empirical methods - including laboratory and field experiments, observations, questionnaires and interviews - the Handbook provides comprehensive coverage of theory and method, financial and consumer behaviour, the environment and biological perspectives. This second edition also includes new chapters on topics such as neuroeconomics, unemployment, debt, behavioural public finance, and cutting-edge work on fuzzy trace theory and robots, cyborgs and consumption.

With distinguished contributors from a variety of countries and theoretical backgrounds, the Handbook is an important step forward in the improvement of communications between the disciplines of psychology and economics that will appeal to academic researchers and graduates in economic psychology and behavioral economics.

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In healthcare, for example, everybody wants you to be healthy. Your family, yourself, the healthcare system. There are cases where the incentives are aligned. They are often not, but there are cases where they are. This is an oldie but a goodie. Mindless Eating is also about that — how the food environment affects us. Nudge is also about that — how we can actually design the environment or external influences to make better decisions.

But The Person and the Situation was the first book to articulate how we think we are making decisions, when the reality is that the environment around us has a lot to do with it. My favourite example of this is a recent one, by Dan Goldstein and Eric Johnson. It involves looking at whether people donate their organs after they die or not. It turns out that that decision hinges mostly on whether the form at the DMV is an opt-in form or an opt-out form i. But the reality is that the real reason has very little to do with internal preferences, and a lot to do with whether the form was opt-in or opt-out.

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The Nobel prize in economics was awarded in to a psychologist, Daniel Kahneman. That indicates some appreciation of the contribution of psychology to the economics field. But do you think that the economics profession has adequately taken on board the insights of behavioural economics? Is there a particular area of economics where you think it could be more usefully applied? Different disciplines — sociology, anthropology, philosophy, psychology and economics — have different approaches to how they think about human behaviour. Each of them has the right to view human behaviour from their perspective.

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Economic Psychology | Wiley Online Books

The same can be said about economics. Economics is a discipline that describes human behaviour from a certain perspective — a very rational, basic approach — and this view has some insights and valuable notions. For that reason, economists should continue doing what they are doing. Where economics should take behavioural economics into account is when it comes to implications and applications in the real world.

It tells policymakers, businesses and individuals what to do. The prescriptive part, when we tell people what to do — that one should be much more broad. There is no question that behaviour is the ultimate goal — to try to understand behaviour, and how to change or modify it. I hope we can create a discipline that is much more empirically based and data driven. It will draw from all the social sciences equivalently as we approach problems in the real world, and try to find solutions for them.

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The Cambridge Handbook of Psychology and Economic Behaviour

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