A synthesis of behavioural and mainstream economics

Abstract

Mainstream economic theory is based on the rationality assumption: that people act as best they can to promote their interests. In contrast, behavioural economics holds that people act by behavioural rules of thumb, often with poor results. We propose a synthesis according to which people indeed act by rules, which usually work well, but may work poorly in exceptional or contrived scenarios. The reason is that like physical features, behavioural rules are the product of evolutionary processes; and evolution works on the usual, the common—not the exception, not the contrived scenario.

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Change history

  • 12 June 2019

    An amendment to this paper has been published and can be accessed via a link at the top of the paper.

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Acknowledgements

We thank A. Rai, a student at the Indian Institute of Technology, Kanpur, and a past intern at the Hebrew University’s Federmann Center for the Study of Rationality, for helping us internalize many of the above references. Also, long-standing research support from the Israel Science Foundation is gratefully acknowledged. The funders had no role in study design, data collection and analysis, decision to publish or preparation of the manuscript.

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Correspondence to Robert J. Aumann.

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Aumann, R.J. A synthesis of behavioural and mainstream economics. Nat Hum Behav 3, 666–670 (2019). https://doi.org/10.1038/s41562-019-0617-3

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