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Austrian behavioral economics

Published online by Cambridge University Press:  26 February 2021

Glen Whitman
Glen Whitman*
Affiliation:
Department of Economics, California State University, Northridge, USA
*
Corresponding author. Email: [email protected]
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Abstract

This paper explores the potential for gains from trade between Austrian and behavioral economics, with a focus on how the two schools of thoughts can constructively critique each other. Among other things, the Austrian critique of behavioral economics would urge it to jettison its restrictive and axiomatic definition of rationality, and to treat humans as active agents rather than passive recipients of environmental and cognitive influences. Meanwhile, the behavioral critique of Austrian economics would push it to take more seriously the fundamental question of how individuals arrive at choices and to analyze how such choices can interact with ‘micro-institutional’ choice environments.

Keywords

Austrian economicsbehavioral economicssubjectivismmethodological individualismspontaneous orderknowledge problem
Type
Symposium on Institutional Analysis, Market Processes, and Interdisciplinary Social Science
Information
Journal of Institutional Economics , Volume 18 , Issue 3 , June 2022 , pp. 449 - 466
Copyright
Copyright © Millennium Economics Ltd 2021

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