Revision or Revolution? A Note on Behavioral vs. Neoclassical Economics

SDP No. 2018-005

26 Pages Posted: 22 Jul 2018

See all articles by Ronald Schettkat

Ronald Schettkat

University of Wuppertal - Department of Economics

Date Written: May 14, 2018

Abstract

Behavioral economics, the analysis of economic decisions, has made enormous progress over the last decades and become accepted as a major field in economics. How is behavioral economics to be compared to the neoclassical model? As a revision of the neoclassical model enhancing the set of variables for motivation such as fairness in the utility function which is then to be maximized? Or is behavioral economics a revolution, a departure from the neoclassical axioms, a new model? This paper argues that many of the findings in behavioral economics are incompatible with the neoclassical model and have paved the way for a revolution in economics.

Keywords: Behavioral Economics, Neoclassical Economics

JEL Classification: A, B, D, E

Suggested Citation

Schettkat, Ronald, Revision or Revolution? A Note on Behavioral vs. Neoclassical Economics (May 14, 2018). SDP No. 2018-005, Available at SSRN: https://ssrn.com/abstract=3204441 or http://dx.doi.org/10.2139/ssrn.3204441

Ronald Schettkat (Contact Author)

University of Wuppertal - Department of Economics ( email )

42097 Wuppertal
Germany

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