Principles of Behavioral Economics: Microeconomics and Human Behavior

by Sanjit Dhami

Overview

Principles of Behavioral Economics, written by an acknowledged leader in the field, provides a comprehensive introduction to one of the most exciting areas of modern economics. It demonstrates how models of economic theory can be enriched by using interdisciplinary insights from psychology, sociology, evolutionary biology, and neuroscience to build the basis for a more empirically supported set of economic principles. Unique in its level of rigor and lucidity, the book highlights the important link between theoretical and empirical economics by demonstrating the usefulness of a range of data sources such as observational data, lab data, survey data, and neuroeconomic data. This field-defining textbook argues that behavioral economics is not just a supplement to mainstream economics. Taking behavioral economics seriously requires a total rethink, and eventual transformation, of every area of economics.

Product Details

ISBN-13:	9781009422291
Publisher:	Cambridge University Press
Publication date:	01/16/2025
Pages:	698
Product dimensions:	7.99(w) x 9.96(h) x 1.50(d)

About the Author

Sanjit Dhami is Professor of Economics at the University of Leicester. He is the author of the seven-volume book, The Foundations of Behavioral Economic Analysis (2020), the leading graduate book in the area. He is also the co-author, with Cass Sunstein, of Bounded Rationality: Heuristics, Judgement, and Public Policy (2022). His research has addressed fundamental questions in behavioral economics and has spanned some of its major areas such as decision making under risk and uncertainty, other-regarding preferences, time discounting, game theory, and bounded rationality.

Table of Contents

Part I. Behavioral Decision Theory: 1. The traditional approach to decision making under risk and subjective uncertainty; 2. Modern approaches to decision making under risk and subjective uncertainty; Part II. Other Regarding Preferences: 3. Evidence on human pro-sociality, morality, and ethics; 4. Theory and applications of pro-social behaviour; Part III. Behavioral Time Discounting: 5. The traditional approach to time preferences; 6. Behavioral approaches to time preferences; Part IV. Behavioral Game Theory; 7. Introduction to behavioral game theory; 8. Topics in behavioral game theory; Part V. Bounded Rationality: 9. Bounded rationality I: judgement heuristics; 10. Bounded rationality II: topics in bounded rationality; Part VI. Further Topics in Behavioral Economics: 11. A smorgasbord of topics in behavioral economics; 12. Behavioral welfare economics.

Editorial Reviews

‘Again, Sanjit Dhami has written an utterly fascinating book - this time aimed at teaching behavioral economics to undergraduates. It is the perfect book for that. But it is also the perfect book for anyone who wants to know how behavioral economics fits into standard economics, and then, further, how it fits into the social sciences as a whole. Every economist, and every social scientist, will learn a lot and find great pleasure in Principles of Behavioral Economics.’ George Akerlof, Nobel Laureate in Economics 2001; University Professor, Georgetown University

‘A masterful blend of theory and empirical evidence, this is an essential resource for students and researchers, and a must-read for anyone interested in the future of economic thought.’ Ernst Fehr, Professor of Economics, University of Zurich

‘Sanjit Dhami, author of the definitive graduate textbook on behavioral economics, has brought his wisdom, eloquence, and clarity of writing to the creation of an equally impressive volume aimed at undergraduates. In-depth and comprehensive, this book is perfect for year-long course sequences or for intelligent laypeople who want to gain a deep familiarity with the field.’ George Loewenstein, Herbert A. Simon University Professor of Economics and Psychology, Carnegie Mellon University

‘Because of its rapid growth and many connections to other disciplines, behavioral economics has sometimes appeared to be a rich but somewhat disparate collection of theories and models, empirical findings, and puzzles. With this landmark textbook, we finally have a comprehensive, unified, and remarkably pedagogical treatment of the entire field, seamlessly integrated with micro and game theory, experiments, and real-world applications. It will undoubtedly become the reference textbook for undergraduate courses on the subject, and the natural entry point into the field for many other readers.’ Roland Bénabou, Theodore A. Wells ’29 Professor of Economics and Public Affairs, Princeton University

‘In Principles of Behavioral Economics: Microeconomics and Human Behavior, Sanjit Dhami offers a companion volume, accessible to undergraduates, to his landmark graduate-level survey of behavioral economics, Foundations of Behavioral Economic Analysis. Like its predecessor, the companion volume is distinguished by its detailed yet readable coverage of theory and evidence and its balanced discussion of the philosophical and methodological differences and similarities between behavioral and neoclassical approaches to microeconomics. Interested undergraduates will gain from reading this masterful book.’ Vincent P. Crawford, Professor, University of California, San Diego and University of Oxford

‘This is an outstanding undergraduate textbook in behavioral economics. It not only highlights key results in the field but also conveys the excitement of our ongoing quest to make economics truer. I highly recommend it to all.’ Xavier Gabaix, Pershing Square Professor of Economics and Finance, Harvard University

From the Publisher