The Psychology of Economic Decisions

Isabelle Brocas is Assistant Professor at the University of Southern California, and Assistant Professor (on leave) at the Free University of Brussels. She is also a research affiliate at CEPR, a research advisor at EERC (Russia), and co-editor of the 'Annals of Marie Curie Fellows Association'.Juan D. Carrillo is Associate Professor at the University of Southern California, and is currently on leave from the Free University of Brussels. He is also a research affiliate at CEPR, a research advisor at EERC (Russia), and Associate Editor of the Spanish Economic Review.

• 0. Introduction ; PART I. BELIEFS: ORIGINS, FORMATION, AND EVOLUTION ; 1. Costs and constraints in the economy of the mind ; 2. Understanding under- and over-reaction ; 3. Self-serving beliefs and the pleasure of outcomes ; PART II. DYNAMIC CHOICES: CONSISTENCY, COMMITMENT AND INTERTEMPORAL SEPARABILITY ; 4. Commitment devices under self-control problems: an overview ; 5. Consistent intertemporal decision making through memory and anticipation ; 6. Dynamic decisions under uncertainty: some recent evidence from economics and psychology ; PART III. LIMITED COGNITION: ATTENTION, PREFERENCE FORMATION AND RISK EVALUATION ; 7. Thinking about attention in games: backward and forward induction ; 8. Arbitrarily coherent preferences ; 9. Perception matters: psychophysics for economists ; PART IV. AFFECTIVE BEHAVIOR: THE ROLE OF EMOTIONS IN DECISION-MAKING ; 10. The dark-side of opportunity: regret, disappointment and the cost of prospects ; 11. Mood regulation and decision-making: is irrational exuberance really a problem? ; 12. Which chance was lost? The psychology of damage awards under the loss of chance doctrine