Summary of the
articles of
Economic
Psychology
,Inhoudsopgave
Edwards, W. (1954). The theory of decision making. Psychological Bulletin, 51, 380-417.................................4
Kahneman, D., & Tversky, A. (1984). Choices, values, and frames. American Psychologist, 39, 341-350...........7
Kahneman, D., Knetsch, J. L., & Thaler, R. H. (1991). The endowment effect, loss aversion, and status quo
bias. Journal of Economic Perspectives, 5, 193-206.......................................................................................11
Thaler, R. H. (1985). Mental accounting and consumer choice. Marketing Science, 4,199–214.......................13
Loewenstein, G., & Thaler, R. H. (1989). Intertemporal choice. Journal of Economic Perspectives, 3, 181-193.
.................................................................................................................................................................... 15
Mellers, B. A., Schwartz, A., & Ritov, I. (1999). Emotion-based choice. Journal of Experimental Psychology:
General, 128, 1–14....................................................................................................................................... 17
Zeelenberg, M., Breugelmans, S. M., & De Hooge, I. E. (2012). Moral sentiments: A behavioral economics
approach. In: A. Innocentie, & A. Sirigu (Eds.). Neuroscience and The Economics of Decision Making (pp. 73-
85). Routledge............................................................................................................................................. 19
Van Lange, P. A. (2000). Beyond self-interest: A set of propositions relevant tointerpersonal orientations.
European Review of Social Psychology, 11, 297-331.....................................................................................21
Thielmann, I., Böhm, R., Ott, M. & Hilbig, B. E. (2021). Economic games: Anintroduction and guide for
research. Collabra Psychology, 7, 19004.https://doi.org/10.1525/collabra.19004.........................................23
Cohn, A., Maréchal, M. A., Tannenbaum, D., & Zünd, C. (2019). Civic honesty across the globe. Science,
eaau8712. DOI: 10.1126/science.aau8712.................................................................................................... 35
Shalvi, S., Dana, J., Handgraaf, M. J., & De Dreu, C. K. (2011). Justified ethicality:Observing desired
counterfactuals modifies ethical perceptions and behavior. Organizational Behavior and Human Decision
Processes, 115, 181-190............................................................................................................................... 37
Seuntjens, T. G., Zeelenberg, M., Van de Ven, N., & Breugelmans, S. M. (2019). Greedy bastards: Testing the
relationship between wanting more and unethical behavior.Personality and Individual Differences, 138, 147-
156.............................................................................................................................................................. 38
Thaler, R. H. (1986). The psychology and economics conference handbook: Comments on Simon, on Einhorn
and Hogarth, and on Tversky and Kahneman. Journal of Business Studies, 59, S279-S284.............................39
Loewenstein, G. (1999). Experimental economics from the vantage-point of behavioural economics.
Economic Journal, 109, F25-F34.................................................................................................................... 41
Camerer, C. (1999). Behavioral economics: Reunifying psychology and economics. PNAS, 96, 10575-10577.. 42
Kahneman, D. (2003). A psychological perspective on economics. American Economic Review, 93, 162-168. 44
, Edwards, W. (1954). The theory of decision
making. Psychological Bulletin, 51, 380-417.
This article discusses various aspects of decision-making theory, focusing on the
concept of utility maximization. It explores different experiments and approaches
used to measure and understand decision-making processes.
The article begins by discussing the traditional theory of utility maximization,
which assumes that individuals behave rationally by maximizing their utility or
expected utility. However, experiments have shown inconsistencies in decision-
making, challenging this theory.
The concept of utility is further explored, with experiments attempting to measure
indifference curves, which represent the preferences between different
combinations of goods. These experiments involve hypothetical scenarios and
ranking exercises to determine subjective values and preferences.
The article also delves into the challenges of measuring utility and subjective
probability, as well as the influence of variance preferences in decision-making. It
discusses the importance of considering the variance and higher moments of the
utility distribution when predicting choices in risky decision-making situations.
Alternative theories of decision-making are also mentioned. Shackle's theory of
decision-making under risk and uncertainty is discussed, which does not assume
maximizing behavior. Cartwright and Festinger propose a theory about decision
times and the role of restraining forces.
The article concludes by highlighting the need for further research in the area of
decision-making, particularly in understanding the social aspects of bargaining and
the interaction of utilities for different goods. It also emphasizes the importance of
well-designed experiments and caution against drawing strong conclusions from
small-scale or poorly controlled studies.
Overall, the article provides insights into the complexities of decision-making and the
challenges faced in understanding and predicting human choices.
The document discusses several principles of decision-making. One principle is
utility maximization, which assumes that individuals behave rationally by
maximizing their utility or expected utility. This principle suggests that economic man
always chooses the best alternative available to them. Another principle is the
minimax principle, which involves minimizing the maximum possible loss or regret
in decision-making. The document also mentions the principle of maximizing
expected value, where choices are made to maximize the expected value of
outcomes. Additionally, the document touches on the principle of maximizing the
maximum expected gain and the principle of maximizing a weighted average of
the maximum and minimum expected gains. These principles provide different
frameworks for decision-making in various contexts.
In the article, the challenges of measuring utility and subjective probability are
discussed in the context of decision-making. Utility refers to the subjective value or
satisfaction that individuals derive from different outcomes or choices. However,
