The Psychology of Economic Decisions

Isabelle Brocas is at the Department of Economics, Columbia University. She is also a research affiliate at CEPR, and co-editor of the Annals of Marie Curie Fellows Association.Juan D. Carrillo is Associate Professor at Columbia University Graduate School of Business. He is also a research affiliate at CEPR, and Associate Editor of the Spanish Economic Review.

A fascinating and timely book.

• Introduction ; PART I: THE CAUSES AND CONSEQUENCES OF 'IRRATIONAL' CONDUCTS ; 1. The Psychology of Irrationality: Why people make foolish, self-defeating choices ; 2. Irrational Pursuit: Hyper-incentives from a visceral brain ; 3. The Pursuit and Assessment of Happiness May Be Self-Defeating ; PART II: IMPERFECT SELF-KNOWLEDGE AND THE ROLE OF INFORMATION ; 4. Behavioral Policy ; 5. Information and Self-Control ; 6. Self-Signaling and Diagnostic Utility in Everyday Decision-Making ; PART III: IMPERFECT MEMORY AND LIMITED CAPACITY TO PROCESS INFORMATION ; 7. Mental Accounting and the Absentminded Driver ; 8. Self-Knowledge and Self-Regulation: An economic approach ; 9. A New Challenge for Economics: 'The frame problem' ; PART IV: TIME AND UTILITY ; 10. Experienced Utility and Objective Happiness: A moment-based approach ; 11. Making Sense: The causes of emotional evanescence ; 12. Temporal Construal Theory of Time-Dependent Preferences ; PART V: EXPERIMENTAL PRACTICES IN PSYCHOLOGY, ECONOMICS, AND FINANCE ; 13. Economists' and Psychologists' Experimental Practices: How they differ, why they differ, and how they could converge ; 14. Psychology and the Financial Markets: Applications to understanding and remedying irrational decision-making ; 15. What Causes Nominal Inertia? Insights from experimental economics