The rise and rise of behavioural economics

Behavioural economics have become an ever more trendy way of explaining the crisis. It attempts to use cognitive and emotional factors to understand economic decisions by consumers, borrowers and investors. Critics argue that this emphasis on psychology naturalises economics, consigning economic decision-making to the sphere of flawed 'human nature'. In this fascinating debate a panel of top notch speakers demystify the subject and do battle on the merits of its approach and usefulness. The speakers are: Leigh Caldwell chief executive, Inon; Professor Emre Ozdenoren associate professor of economics, London Business School; Dr Stuart Derbyshire senior lecturer, School of Psychology, University of Birmingham and Dr Michael Savage investment banker and writer, financial economics and development.

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News & Politics

Tags:

• Economics

[wsmythe]

2) There is no such thing as 'behavioural economists' or BE theory, we should instead talk about 'behavioural scientists' and how to apply it for business and gov't so that people and businesses can make better decisions .. and it's not a 'new theory' but the result of decades of scientific experimentation that has provided an in-depth understanding of a wide range of behavioural principles - it's not new; perhaps new to economists, who are in shock, understandably.

[wsmythe]

I am sorry but I really believe you are missing the point about BE. 1) we should really be stopping talking about BE as an area of Economics - BE's intention is not to predict the economy... but to understand how people make decisions at a micro-level, which can influence the economy if events are of large scale.

[wsmythe]

Interesting, yes, people make decisions for a reason - just a different reason : I think it is related to the very basic definers of being a human being: being social animals (following the herd), surviving and applying the minimal effort to things (finding balance- cognitive dissonance, loss aversion ; but we are not even aware of it... There are reasons, but we often don't understand them. We are still irrational.