Top Behavioral Economics Textbooks

The third edition of this successful textbook is a comprehensive, rigorous survey of the major topics in the field of behavioral economics. Building on the strengths of the second edition, it offers an up-to-date and critical examination of the latest literature, research, developments and debates in the field. Offering an inter-disciplinary approach, the authors incorporate psychology, evolutionary biology and neuroscience into the discussions. And, ultimately, they consider what it means to be ‘rational’, why we so often indulge in ‘irrational’ and self-harming behavior, and also why ‘irrational’ behavior can sometimes serve us well.

A perfect book for Economics students taking a module in Behavioural Economics at higher undergraduate level, or for students with an economics background taking a behavioural economics module at Master's level.

Over the last few decades behavioral economics has revolutionized the discipline. It has done so by putting the human back into economics, by recognizing that people sometimes make mistakes, care about others and are generally not as cold and calculating as economists have traditionally assumed. The results have been exciting and fascinating, and have fundamentally changed the way we look at economic behavior.

This textbook introduces all the key results and insights of behavioral economics to a student audience. Ideas such as mental accounting, prospect theory, present bias, inequality aversion and learning are explained in detail. These ideas are also applied in diverse settings such as auctions, stock market crashes, charitable donations and health care, to show why behavioral economics is crucial to understanding the world around us. Consideration is also given to what makes people happy, and how we can potentially nudge people to be happier.

This new edition contains expanded and updated coverage of contract theory, bargaining in the family, time and risk, and stochastic reference points, among other topics, to ensure that readers are kept up to speed with this fast-paced field. The companion website is also updated with a range of new questions and worked examples. This book remains the ideal introduction to behavioral economics for advanced undergraduate and graduate students.

A concise and reader-friendly textbook on one of the hottest developments in social and behavioral science today. Covering all core areas of the subject, Erik Angner clearly lays out the theory and explains the intuitions behind it. It is full of examples, exercises, and problems drawn from fields such as economics, management, marketing, political science, and public policy. Among other things, the book shows how to apply principles of behavioral economics to science, business, medicine, and daily life. No advanced mathematics is required.Â

An ideal introduction for students coming to behavioral economics from various fields, at both undergraduate and postgraduate levels. It is equally suitable for general readers who have been captivated by popular-science books on behavioral economics and want to know more.

This is the first definitive introduction to behavioral economics aimed at advanced undergraduate and postgraduate students. Authoritative, cutting edge, yet accessible, it guides the reader through theory and evidence, providing engaging and relevant applications throughout. It is divided into nine parts and 24 chapters:

Part I is on behavioral economics of risk, uncertainty, and ambiguity. The evidence against expected utility theory is examined, and the behavioral response is outlined; the best empirically supported theory is prospect theory.

Part II considers other-regarding preferences. The evidence from experimental games on human sociality is given, followed by models and applications of inequity aversion, intentions based reciprocity, conditional cooperation, human virtues, and social identity.

Part III is on time discounting. It considers the evidence against the exponential discounted utility model and describes several behavioral models such as hyperbolic discounting, attribute based models and the reference time theory.

Part IV describes the evidence on classical game theory and considers several models of behavioral game theory, including level-k and cognitive hierarchy models, quantal response equilibrium, and psychological game theory.

Part V considers behavioral models of learning that include evolutionary game theory, classical models of learning, experience weighted attraction model, learning direction theory, and stochastic social dynamics.

Part VI studies the role of emotions; among other topics it considers projection bias, temptation preferences, happiness economics, and interaction between emotions and cognition.

Part VII considers bounded rationality. The three main topics considered are judgment heuristics and biases, mental accounting, and behavioral finance.

Part VIII considers behavioral welfare economics; the main topics are soft paternalism, and choice-based measures of welfare. Finally, Part IX gives an abbreviated taster course in neuroeconomics.

Introduction to Behavioral Economics is focused on the broad principles of behavior, which are illustrated using real-world examples from experimental literature as well as experiential examples. Real-world examples are drawn from news items, historical accounts and the economics literature. Experimental examples are drawn from the economics literature. These examples are discussed providing explanatory figures and interpretations. With the rise of both behavioral finance and behavioral industrial organization, undergraduates now clamor for formal training and instruction in behavioral economics. Introduction to Behavioral Economics covers all the ways consumers and other economic agents behave in nonrational manner and prepares readers to make rational economic choices. This text provides experiments as a set of examples of the broader principles of behavior.