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The total benefit of current levels* of migration to Australia will outweigh the total costs to Australia's economy.
Useful insights include loss aversion and individual responses to probabilities, but many insights were incremental to existing knowledge rather than wholly new.
It may be more accurate to say that it harnesses existing insights (particularly from experimental psychology) to explain individuals' economic behaviour.
We need to better understand the drivers and complexities of individual behaviour.
Definitely a valuable addition to the tools that economists have for understanding human behaviour and social interaction. But sometimes it is oversold as being an alternative to the approach neoclassical economics, whereas in my opinion it's a way of enriching that approach.
Behavioural economics improves on traditional economics by allowing a more realistic understanding and modelling of people's preferences rather than assuming we are all maximising our individual pay-offs. Most notably, it allows an understanding of social preferences and the implications for policy
of such preferences. Experimental economics is playing an important role in improving our understanding of human behaviour, which then feeds into more realistic theoretical models.
Behavioural economics is a work in progress. It is still much better to approximate motivation using maximisation assumptions otherwise economics will end up in the morass psychology is stuck in.
I agree in principle - but we are taking very much an economics perspective here. I feel Behavioural Economics combines insights from behavioural sciences with the normative backbone of economics - that is the power it has. Having said that, its main contribution are not "useful insights into individual
behaviour", that is only true for the economists who worked for too long with the fictitious character of the homo economics, the main contribution is identifying "inefficiencies" resulting from cognitive biases and providing solutions how to help people to make better decisions affecting their health,
wealth and happiness (to cite Thaler and Sunstein).
Many aspects of real-life decision-making have no clear analogue or explanation in the world of traditional economics in which self-interested, atomistic, fully-informed agents allocate their resources by applying cold and near-perfect optimisation. 'Behavioral economics' is the umbrella term under
which sit many attempts by economists over the past 20 years or so to explain these aspects of decision-making in ways that are consistent with an expanded notion of economic reasoning and can be integrated with existing economic models. The lessons from these attempts have been both new (to economics)
and useful (to policy-making and, potentially, to welfare).
Ideas such as endowment effects, inconsistent time preferences provide different explanations and predictions of behaviour compared with the neoclassical model. Often the behavioural economics explanation is a better approximation to a complex reality.
The realism revolution now taking place in economics, exemplified by behavioural economics, is leading to useful advice to all levels in society: advice to individuals on how to self-optimise given our mental limitations; advice to companies how to manage employees and consumers who want more than a
wage and a cheap product; and advice to governments on what the goal is they should aim for (wellbeing!) and how to achieve that. I think we are only at the early stages of this change in economics though. Behavioural economics hasn't even managed yet to overturn the most glaringly nonsense bits of classical economics that are still in the dominant textbooks, such as that recessions are times when workers take a mass
holiday, or that people run around with full preference maps. There is thus a long, long way to go.
The name 'behavioural economics' is new - the rest isn't. It is part of a strong stream in microeconomics that goes back at least 50 years (and arguably a lot longer). It is important - because understanding the limitations of our models of decision making, where they apply and when, and adapting these
models or developing alternative approaches, is important. The use of laboratory testing is more recent, but the development of alternative theoretical approaches to address issues in decision making (bounded rationality as per Simon and Leibenstein, decision making under uncertainty as per Allais and
Savage, etc) has long been part of a good graduate education in microeconomics. And the claims that 'new' discoveries in behavioural economics somehow undermine theory can only be made by those who have not studied microeconomic theory in any depth.
At least in the subfield of retirement economics, behavioural notions have been fruitful. Professor John Campbell's presidential address to the American Economic Association this year makes this point persuasively.
Behavioural Economics provides useful insights into individual and collective behaviour . Many of these insights build upon those already gained in the discipline of Marketing.
A lot of the ideas have been around for a long time, often in other disciplines, but the experimental methodology is quite distinct from the deductive approach normally taken in microeconomics. It will be interesting to see in the long run if a new microeconomics eventually emerges.
Behavioural economics provides useful insights but is insufficiently unified to rival homo economics.
Understanding the cognitive and other biases in individual behaviour will lead to a greater understanding of individual behaviour. Where I have less confidence is in understanding what behavioural economics brings to our understanding of market outcomes. If biases are understood,
it could bring about significant arbitrage opportunities that make markets look unbiased.
Many of the insights from behavioural economics, arising mostly from better understanding individual decision making, have been useful in shaping economic theory, applied economics and economic policy.
We have discovered many ways in which actual behaviour differs from standard model of optimisation
More precisely, experimental economics has provided sound evidence that people behave in ways modelled by behavioural economics. For instance, extensive and consistent evidence from lab experiments using the dictator and ultimatum games suggest that care about the social dimension of their
Uncertain (neither agree nor disagree)