BEHAVIORAL ECONOMICS AND THE NEED OF PSYCHOLOGY IN ECONOMIC RESEARCH

Abstract

The turning point in economic science has now come, marked especially by triggering the biggest crisis since the Great Depression of '29-'33, has called into question the need to reconsider the status of economic science and finding ways in which it can increase its practical foundations. In the elaboration of this study I’ve took into account the fact that beyond any abstract, formal and mathematical model, economics is a science, having the man in its center. Furthermore, every economic process is based on the human being. But the way individuals behave does not follow precisely the pattern predicted by classical and neoclassical models, but most of the time they are making decisions under the influence of psychological factors. Starting from these assumptions I considered important to highlight a real need for psychology in economic research. Therefore, the aim of this work is exclusively theoretical meant to show that the study of psychological factors is necessary in economic research, because it allows a better explanation of the economic problems and lead to obtaining results closer to reality than those who only take into consideration economic factors. In this way I appealed to behavioral economics. This represents a new trend of economic thinking that reunites psychology with economy. The thing that I observed after finishing the study is that behavioral economics can increase the explanatory power of economics by providing more realistic psychological bases, because human behavior is not only the subject matter of economics but psychology too.

Keywords

• behavioral economics; psychological factors; economic process; economic behaviour;