The oversight of behavioral economics on Hayek's insights
pp. 301-312
in: Roger Frantz, Robert Leeson (eds), Hayek and behavioral economics, Berlin, Springer, 2013Abstract
Behavioral economics comes out as a new program of economic research which criticizes the unrealism of the neoclassical paradigm and aims at a more realistic analysis of economic behaviors, and in particular of the decision-making processes. The criticisms toward neoclassical economics are focused on the assumptions about homo oeconomicus, and in particular on the postulate of full rationality. Starting in the 1950s, theoretical and empirical analysis was used to argue that real subjects have a kind of rationality different to that adopted in economic models. The result was the idea of bounded rationality — illustrated by Herbert Simon — which describes the cognitive, mnemonic and computational limits of human rationality, underpinning that they are neglected by neoclassical economics. Another related result was the criticism of exnected utility theory and. more generallv. of rational choice.
