The Making of Behavioral Development Economics
A core insight from early behavioral economics is that much of human judgment and behavior is influenced by "fast thinking" that is intuitive, associative, and automatic; very little human thinking resembles the rational thinking that cha...
| Main Authors: | , |
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| Format: | Working Paper |
| Language: | English |
| Published: |
World Bank, Washington, DC
2018
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| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/708521516820237922/The-making-of-behavioral-development-economics http://hdl.handle.net/10986/29283 |
| Summary: | A core insight from early behavioral
economics is that much of human judgment and behavior is
influenced by "fast thinking" that is intuitive,
associative, and automatic; very little human thinking
resembles the rational thinking that characterizes homo
economicus. What is less well-recognized is that innate
reliance on cognitive shortcuts means that cultural mental
models --categories, concepts, social identities,
narratives, and worldviews -- profoundly influence judgment
and behavior. Individuals have a cultural
"toolkit" or "repertoire" of mental
models that they use to perceive and interpret a situation
and construct a response. Many researchers have connected
cultural mental models to economic development, yet they
rarely identify their research findings as
"behavioral" economics. This research constitutes
a second strand of behavioral economics that illuminates the
tight interlinkages between preferences, culture, and
institutions and points to new policy opportunities. It
brings the discipline almost full circle back to 18th and
19th century perspectives. This essay cautions against
strong reductionism in which sociological influences on
decision making are squeezed into a rational actor model. |
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