Stop Trying to Turn Economics into a Branch of Psychology
Recently, a relatively new economics called behavioral economics (BE) has started to gain popularity. Its practitioners, such as Daniel Kahneman, Vernon Smith, and Richard Thaler, were awarded Nobel Prizes for their contribution in the field of BE.
The BE framework emerged because of dissatisfaction with the neoclassical theory regarding consumer choices. In the neoclassical theory, individuals are presented as if a scale of preferences is hard-wired in their heads. Regardless of anything else, this scale remains the same all the time.