In one sense, applying insights about human nature and action to the explanation of economic behavior is as old as the discipline of economics itself. In fact, you might say that Adam Smith’s theory of the “invisible hand” just is the recognition of how the self-interested actions of individuals play out at the scale of local and national collective behavior. In other words, all economics is squarely founded on psychology in a general sense.
In another, narrower sense, though, the marriage of economic theory with more sophisticated insights into human behavior gleaned from the increasingly empirical orientation of psychologists over the past few decades is a much more recent phenomenon. It is this intersection of classical economic theory and recent personality and social psychology that we have in mind when we speak of “behavioral economics.”
The sub-discipline that calls itself by that name is less than 50 years old, having grown largely out of work done by Daniel Kahneman (see below) and the late Amos Tversky, beginning in the late 1960s at the Hebrew University of Jerusalem, and later at Stanford University. To be sure, their work on heuristics and decision-making under uncertainty, which would eventually grow into what we now call “behavioral economics,” did have some precedents — especially in the writings of Herbert A. Simon and others on real-world human cognitive limitations due (as they saw it) to finite neural computational resources (“bounded rationality”). Nevertheless, Kahneman and Tversky’s explicit challenge to the reigning paradigm of “rational choice theory” in economics (later elaborated by them and renamed “prospect theory”) was startling, not to say revolutionary. The theoretical rigor and empirical support of their work was so great, however, that it quickly won recognition, founding an entirely new academic field, and with it, a new way of thinking about economic behavior and human behavior generally.
For this list, we have enforced only one requirement: to make the list, the individual in question must be housed in either an economics or a psychology department, and must be publicly identified as a behavioral economist (among other things).
Beyond that, we have simply tried to assemble as influential and vigorously active a group of 25 people as possible to represent this important, if upstart, academic field.
Please note: The list is alphabetical.
25 Top Behavioral Economists
1. George A. Akerlof
Akerlof was born in New Haven, Connecticut, in 1940. He received his Ph.D. in economics in 1966 from the Massachusetts Institute of Technology (MIT), where he studied with Robert Solow. Akerlof is currently University Professor at the McCourt School of Public Policy at Georgetown University and Daniel E. Koshland Professor of Economics Emeritus at the University of California, Berkeley.
Mainstream economics has long been dominated by the assumption of “rational choice,” which is the idea that for all practical purposes the behavior of companies and consumers may be modeled by the principle of “utility maximization” — that is, they may be relied upon to behave in accordance with their own best interests in terms of economic gain. By the late 1960s, however, it had become clear that real-life economic transactions are subject to various “irrational” factors that pose great difficulties for mainstream rationalist theory. Akerlof’s early work focused on one such difficulty — namely, “asymmetric information.”
One of the tacit assumptions of the rational choice framework is that both parties to an economic transaction share the same information (“information symmetry”). Akerlof made his mark by demonstrating that if we drop this unrealistic assumption in favor of the more realistic premise of asymmetric information, we can gain enhanced economic insight. In his landmark 1970 paper, “The Market for ‘Lemons,’ “ Akerlof showed that in a used-car market the information disparity between sellers — who know which cars on the lot are good (“peaches”) and which ones are bad (“lemons”) — and buyers — who, fearing lemons, will refuse to pay peach prices — creates an adverse selection effect which, if unchecked, would eventually drive peaches out of the market leaving only lemons no one wants, thus leading to market collapse.
For his work on asymmetric information, Akerlof shared in the 2001 Nobel Memorial Prize for Economic Sciences. In his Nobel Prize Lecture, he outlined the history of economics in the twentieth century, making the interesting point that John Maynard Keynes’s groundbreaking General Theory of Employment, Interest, and Money (1936) already acknowledged the role of many of the factors now emphasized by behavioral economists, but that his insights were ignored by the increasingly mathematics-minded rationalist school during the middle decades of the past century. For this reason, Akerlof describes himself as a “New Keynesian,” on the understanding that what is new in his Keynesianism is precisely a return to the master’s emphasis on psychology. In his Nobel Prize Lecture, Akerlof embraced the label “behavioral economics.” As he colorfully put the historical point:
Behavioral economics has rediscovered the wild side of macroeconomic behavior. Behavioral economists are becoming lion tamers.
Among the other psychological factors strongly affecting macroeconomic outcomes that Akerlof has identified and studied in his later work are social identity and the role of various social and professional norms.
Akerlof is the author or co-author of more than 60 peer-reviewed journal articles and book chapters, as well as some half-dozen academic and popular books (see below). In addition to the Nobel Prize, he has received numerous awards and other honors. Akerlof is Nonresident Senior Fellow with the Brookings Institution, Director Emeritus of the National Bureau of Economic Research (NBER), and, in 2006, he served as President of the American Economic Association.
2. Dan Ariely
Ariely was born in New York City in 1967, but was raised in Israel. He holds a Ph.D. (1996) in cognitive psychology from the University of North Carolina at Chapel Hill and a Ph.D. (1998) in business administration from Duke University. He is currently James B. Duke Professor of Behavioral Economics in the Fuqua School of Business at Duke University, with joint appointments in the Economics Department, the Psychology Department, and the Duke Institute for Brain Sciences (DIBS). Ariely is also Founder, Co-Founder, or Chief Behavioral Economist with a number of private start-ups, for the most part management consulting firms that apply behavioral economics insights to business strategy, operations, and marketing challenges, as well as public policy.
We had the pleasure of interviewing Ariely in 2015. Through his stimulating, best-selling popular books (see below), Ariely has done as much as anyone to bring the message of behavioral economics — that rationalist economic models are deficient because human beings are not just utility-maximizers — to a broad, popular audience, including business executives and public-sector decision-makers. More specifically, he has written books addressing four large areas of topical concern: (1) the general principles of human cognition and behavior underlying behavioral economics (“predictable irrationality”); (2) the way in which individual motivation, in particular, needs to be rethought in light of these principles; (3) the way these principles influence people’s interactions with one another with respect to honesty and dishonesty; and (4) the implications of these principles for sound financial decision-making regarding spending, saving, and investment, at both the personal and the institutional levels.
In his strictly academic work, Ariely has dealt with all four of these topics, but has cast a still wider net, investigating many other issues besides. Some of these include nonverbal communication, mate selection, the role of time in economic decision-making, the role of poverty in moral judgment-formation, the economics of consumer behavior, neuromarketing, pain perception, medical research protocols, and healthcare organization. In all of these widely varied subject areas, Ariely has brought to bear his deep insight into the ways in which economic and psychological explanations of human behavior interact and mutually enrich each other.
Ariely has published more than 120 academic papers in peer-reviewed journals and as book chapters, in addition to the best-selling popular books already mentioned. He has received many grants, fellowships, awards, lectureships, and honorary degrees, and he sits on numerous academic and governmental boards and committees. Ariely is a very high-profile academic who frequently writes for, and is interviewed by, both print and electronic media. Altogether, his TED talks have received some 10 million page views.
3. Nava Ashraf
Ashraf was born in Iran in 1975 into a Baháʼí family. Her family emigrated to escape religious persecution when she was five years old, settling in Kelowna, British Columbia, in Canada. She holds a Ph.D. (2005) in economics from Harvard University. Ashraf is currently Professor of Economics at the London School of Economics (LSE), and Research Director of the LSE’s Marshall Institute.
Ashraf’s work has centered on applying insights from behavioral economics to problems in international development and the family. Her research has encompassed a number of countries in the developing world, including Kenya, Zambia, South Africa, the Philippines, and El Salvador. It has focused on the following main topics, many of which point to gender-based solutions to development problems:
- In traditional societies like those in Zambia, Ashraf and her colleagues found that commitment, or time-restricted, savings accounts are much more attractive to women than to men.
- Saving rates can be increased by offering interest rates on the basis of hyperbolic discounting.
- The contributions of husbands and wives to household income is dependent upon which spouse controls saving and spending and whether information about household income is shared or private.
- Women who obtain concealable contraceptive devices without their husbands’ knowledge are significantly more likely to use contraception and less likely to give birth.
- Variance in trust games between the US, Russia, and South Africa is surprisingly small, and mainly attributable to expectations of reciprocity.
- It is well known that higher prices may actually increase the use of certain products (such as home water purification devices). It is likely, however, that the reason is not sunk costs (as mainstream theory assumes); rather, the phenomenon is probably mainly due to screening effects (only households that expect to use the product frequently buy it).
In the scant dozen years since her dissertation (as of 2017), Ashraf has authored or co-authored some 25 peer-reviewed journal articles, book chapters, and reports (some of the most important of which are listed below). She has been a Faculty Research Fellow with the National Bureau of Economic Research (NBER). She is currently a Fellow with the Bureau for Research and Economic Analysis of Development (BREAD) and the Centre for Economic Policy Research (CEPR), as well as an Affiliated Professor with MIT’s Jameel Poverty Action Lab (J-PAL) and Editor of the journal Economica. In 1995, at the age of 20, she was awarded the Order of British Columbia, the youngest person ever to receive that honor.
4. Iris Bohnet
Bohnet was born in Switzerland in 1966. She received her doctorate in economics in 1997 from the University of Zurich. She is currently Professor of Public Policy at the John F. Kennedy School of Government at Harvard University (AKA Harvard Kennedy School), as well as Director of that institution’s Women and Public Policy Program, Co-Chair of its Center for Public Leadership’s Behavioral Insights Group, and Faculty Chair of the Swiss-based World Economic Forum’s Young Global Leaders executive program, “Global Leadership and Public Policy for the 21st Century.” Bohnet also served as Academic Dean of Harvard Kennedy School from 2011 until 2014.
Bohnet’s research has mainly focused on applying insights from behavioral economics to help analyze and find solutions for problems in such areas as decision-making, bargaining, establishing trust, and especially gender equality, both in society generally, and in business management settings more specifically. Her most recent work involves applying the notion of “nudges” to reducing the gender gap in various social settings. The work is international in scope, encompassing, in addition to the US and Switzerland, Brazil, China, Turkey, and Oman, as well as other Arab countries in the Middle East. Bohnet has published her research, both in English and in her native German, in such high-profile journals as American Economic Review, American Political Science Review, Quarterly Journal of Economics, Management Science, and Zeitschrift Führung und Organisation.
Bohnet is the author or co-author of some 60 peer-reviewed journal articles and book chapters, as well as two books (see below). The subject of numerous interviews and journalistic profiles around the world, from the US to Switzerland to Australia, she has also published some 20 articles on behavioral economics in various online venues, including Reuters’s and Bloomberg’s websites. Bohnet has received numerous grants and awards, in addition to sitting on the board of directors of multiple academic organizations and business associations, and serving on the editorial board of the Review of Economics and Statistics, the Review of Law and Economics, and the Journal für Betriebswirtschaft.
5. Colin F. Camerer
Camerer was born in Philadelphia, Pennsylvania, in 1959, but grew up in Cleveland, Ohio, and Baltimore, Maryland. He was a child prodigy who earned his bachelor’s degree from Johns Hopkins University in 1976, at the age of 17! He holds an MBA (1979) in finance and a Ph.D. (1981) in behavioral decision theory, both from the University of Chicago’s Graduate School of Business (now known as the Booth School of Business). Camerer is currently Rea & Lela Axline Professor of Business Economics at the California Institute of Technology (CalTech).
In his research, Camerer has focused on the ways in which cognitive psychology and neurobiology can provide insight into economic behavior — that is, the branch of behavioral economics known as “neuroeconomics.” More specifically, he works on the biological bases of decision-making in relation to the construction and confirmation of models of animal behavior, in general, and human economic behavior, in particular. In regard to the latter, he has made notable contributions to our understanding of how individuals and groups estimate risk in decision-making, for example, in such areas as investments, asset market speculation, price bubbles, and so on. Camerer makes extensive use of game theory in his work, as well as of both controlled laboratory experiments and field studies. His classic book, Behavioral Game Theory (2003), is considered a landmark text of the neuroeconomics movement.
Camerer is the author or co-author of more than 90 peer-reviewed journal articles and book chapters, in addition to many book reviews, magazine and newspaper articles, and working papers. He is also the author, co-author, or editor of some half-dozen books (see below). The recipient of numerous substantial grants (eight from the National Science Foundation [NSF] alone), awards, and other honors, he has given dozens of invited talks and served on the editorial board of many academic journals, including the Journal of Behavioral Decision Making and the Journal of Economics & Management Strategy. Camerer is a past President of the Economic Science Association, and, in 2003, he was named Member of the American Academy of Arts and Sciences.
6. Catherine C. Eckel
Eckel (née Coleman) was born in Lynchburg, Virginia, in 1953. She holds a Ph.D. (1983) in economics from the University of Virginia. She has taught at the University of British Columbia, Virginia Tech, and the University of Texas at Dallas, where she was Founder and Director of the Center for Behavioral and Experimental Economic Science. Eckel is currently Sarah and John Lindsey Professor in the Liberal Arts and University Distinguished Professor in the Department of Economics at Texas A&M University, where she directs the Behavioral Economics and Policy Program.
Eckel calls herself an experimental behavioral economist, meaning that her research consists largely of empirical field work, with a focus on the effects of various psychological factors upon ordinary economic calculations. She has made important contributions both to topics of mainly theoretical interest and to others highly relevant to the formulation of policy. The main psychological topics she has studied, often from a modified game-theoretic perspective, include cooperation, risk tolerance, trust, social status, and gender. Over the years, she has won a large number of research grants. More specifically, she has been Principal Investigator or Co-Principal Investigator on more than 40 projects funded by the National Science Foundation, as well as other agencies and foundations.
Eckel is author or co-author of more than 100 peer-reviewed journal articles, book chapters, dictionary entries, book reviews, and other publications (see the list below for some of the most important of these). In addition to her research, she has been unusually dedicated to undergraduate and graduate teaching, as evidenced, among other things, by her winning in 2012 the Carolyn Shaw Bell Award bestowed by the American Economic Association Committee on the Status of Women in the Economics Profession. In naming Eckel as a recipient of this prestigious award, the Committee cited her work in both developing and participating in mentoring programs for women assistant professors. Eckel has sat on the board of numerous academic and governmental boards and professional associations; she has also been a member of the editorial committee of several journals in her field, including a stint from 2005 until 2012 as Co-Editor of the Journal of Economic Behavior and Organization.
7. Ernst Fehr
Fehr was born in Hard, Austria, in 1956. He holds a doctorate (1986) in economics from the University of Vienna. He is currently Professor of Economics and Director of the UBS International Center of Economics in Society at the University of Zurich.
Fehr’s professional work has been wide-ranging, especially from a methodological point of view, encompassing such diverse disciplines as psychology, neuroscience, and evolutionary biology insofar as they relate to human economic behavior. For example, on the evolutionary front, he has conducted many empirical and theoretical studies pertaining to the evolutionary origins of human sociality and cooperation, as well as of more specific phenomena such as reciprocity, altruism, and the sense of fairness. On the neuroscience front, he is one of the founders of the burgeoning field of “neuroeconomics,” which attempts to increase our understanding of human decision-making by applying insights about the way the brain operates. In addition, he has made extensive contributions to core behavioral economics by drawing on personality and social psychology to help construct a theoretical framework within which the economic behavior of bounded-rational agents can be better understood. Moreover, Fehr is also interested in the sub-fields of experimental economics and behavioral finance.
Fehr is the author or co-author of more than 220 peer-reviewed journal articles and book chapters, in both English and German, as well as the author, co-author, or editor of five books (see below). He has received some 18 large-scale research grants over the years from Swiss, Austrian, and European scientific research foundations. The recipient of numerous honorary memberships, fellowships, and degrees, he has also delivered over 150 international conference presentations, keynote addresses, and invited public lectures, including the prestigious Coase Lecture at the London School of Economics and Tanner Lecture at Cambridge University, both in 2011. Among the many awards and other distinctions Fehr has received, the Marcel Benoist Prize bestowed on him in 2008 by the Swiss Confederation and the Oskar-Morgenstern-Medaille given him in 2017 by the University of Vienna stand out.
8. Roland G. Fryer Jr.
Fryer was born in Daytona Beach, Florida, in 1977, but was raised partly in Lewisville, Texas, where he graduated from high school. His father abandoned the family when he was four years old, and the young Fryer experienced considerable economic hardship. He has stated that for a time during his adolescence he was effectively a street kid and gang member. However, he was able to enter the University of Texas at Arlington on an athletic scholarship. Once there, he began to focus on academics, obtaining his bachelor’s degrees in economics magna cum laude from UT-Arlington’s Honors College in 1998. Fryer holds a Ph.D. (2002) in economics from Pennsylvania State University, and is currently Henry Lee Professor of Economics at Harvard University.
Fryer brings the insights of both traditional economic thinking and behavioral economics to bear on problems of racial and gender disparities in American economy and society, and in human cultures more generally. He has stated that in graduate school, he became fascinated by how collective identity among marginalized socioeconomic groups around the world may function as a counterweight to classical rational economic calculation in ways that are read as “self-defeating” by the standards of dominant groups. More specifically, he points to the Burakumin outcast (or “untouchable”) group of Japan and the indigenous Maori of New Zealand, where mechanisms may be seen at work that are analogous to the deprecation of group members who zealously pursue education as “acting white” in many inner-city black and Hispanic communities in the US.
In other work, Fryer has creatively applied similar combinations of mainstream-economic and behavioral analysis to a wide variety of economic questions relating to race and gender. For example, in a classic paper he has shown how the psychological trait known as “loss aversion” can help in formulating more-effective procedures for linking teacher pay incentives to student performance (see his NBER Working Paper of July, 2012, listed below). In summary, his work is distinguished by a willingness to use whatever theoretical and empirical tools seem to him best suited to the job at hand. Although Fryer has focused in nearly all his work on the plight of the economically and socially disadvantaged in American and other societies, with the explicit aim of discovering what can be done to help them, his lack of an ideological ax to grind and his willingness to let the chips fall where they may have displeased many on the left, who accuse him of “blaming the victim.”
Fryer is the author or co-author of some 60 peer-reviewed journal articles, book chapters, and working papers (some of the most important of which are listed below). He is the recipient of numerous grants, fellowships, and other awards and honors, including in 2011 a MacArthur Fellowship. In 2015, Fryer won the highly prestigious John Bates Clark Medal for the best American economist under 40.
9. Herbert Gintis
Gintis was born in Philadelphia, Pennsylvania, in 1940. He received his Ph.D. in economics in 1969 from Harvard University. Gintis is currently Professor Emeritus at the University of Massachusetts at Amherst, Visiting Professor in the Economics Department at Central European University in Budapest, Hungary, Visiting Professor in the Department of Economics and Statistics at the University of Siena, Italy, and External Professor at the Santa Fe Institute in New Mexico.
Gintis’s work originally took a fairly orthodox Marxist approach to political economy, but over the years he has branched out in several directions — epistemic game theory, behavioral economics, sociobiology (evolutionary psychology), cultural evolution, and the theory of human capital — always applying whatever theoretical tools seemed appropriate to strengthen and deepen his radical critique of the American economy and society. His first book, co-written with Samuel Bowles, was actually a Marxist analysis of the American education system. His later books, also frequently written with Bowles or other co-authors, focused on progressively broader themes, from the nature of democratic society to the evolutionary underpinnings of human cooperation, reciprocity, and altruism, to his magnum opus, the 2009 Bounds of Reason (see below), which seeks to unify all of the social and behavioral sciences on the basis of behavioral economics and evolutionary biology, especially the master concept of the rationality of time inconsistency (see Note 6, below). This book covers an immense amount of ground, from prospect theory to Bayesianism to game theory to gene-culture co-evolution, all in a relatively brief compass. It is a grand synthesis in the old style, which bids fair to become a contemporary classic.
Gintis is author or co-author (often with Samuel Bowles) of more than 250 peer-reviewed journal articles or books chapters, as well as author, co-author, or editor of some dozen books. While the University of Massachusetts was his academic base during much of his career, Gintis has also held a large number of adjunct and visiting professorships at other universities, both in the US and in Europe, including the University of Paris, among others. During the 1960s, Gintis was active in Students for a Democratic Society (SDS), and in 1968 he became a founding member of the Union for Radical Political Economics (URPE).
10. Paul W. Glimcher
Glimcher was born in Boston, Massachusetts, in 1961. He holds a Ph.D. (1989) in neuroscience from the University of Pennsylvania, where he worked under the direction of the distinguished neuroscientist, Randy Gallistel. Glimcher is currently Julius Silver, Rosyln S. Silver, and Enid Silver Winslow Chair of Neural Science at New York University, with joint appointments in the Psychology Department, the Economics Department, and the Department of Neuroscience and Physiology in the School of Medicine. Glimcher is also Director of NYU’s Institute for the Interdisciplinary Study of Decision Making.
Glimcher is one of the founders of the discipline of neuroeconomics — the effort to discover the neural structures underpinning animal and human behavior generally, and economic behavior, in particular. In his earliest work, he studied those structures in the brainstem and midbrain that control the movement of the eyes. He found evidence that the neural structures primarily responsible for the execution of saccadic eye movements are also involved in the planning of those movements, a discovery which led to his abiding interest in the neurobiology of decision-making. Utilizing fMRI and other advanced techniques, Glimcher has done ground-breaking experimental and theoretical work, which has resulted in many explanatory and even predictive models of real-world animal and human behavior, including the sorts of “irrational” factors that form the main subject of study of behavioral economics.
Specific areas of neuroeconomics to which Glimcher has contributed include the dopamine system’s role in reinforcement learning, the neurobiological basis of human preferences, how people make intertemporal choices, and the important role of divisive normalization (a kind of averaging of the activity of a populations of neurons) in context-dependent decision-making. Perhaps the most stunning finding to issue from Glimcher’s lab is the reported identification of the neural correlates of subjective value (or, in economic parlance, utility). Most recently, Glimcher and colleagues have undertaken the HUMAN Project, a highly ambitious, “big data” longitudinal study of the comprehensive biology and behavior of tens of thousands of New Yorkers, that will far surpass in scope any similar study attempted in the past.
Glimcher is the author or co-author of about 90 peer-reviewed journal articles and book chapters, as well as the author or co-author of three books (see below). He has received numerous research grants, awards, invited lectureships, and other honors. In 2008, Glimcher was elected a Fellow of the American Association for the Advancement of Science (AAAS).
11. Uri Gneezy
Gneezy was born in Tel Aviv, Israel, in 1967. He holds a Ph.D. (1997) in economics from the CentER for Economic Research at Tilburg University in the Netherlands. After graduating, he taught at the University of Chicago, Technion (Israel Institute of Technology), and Haifa University. He is currently Epstein/Atkinson Endowed Chair in Behavioral Economics and Professor of Economics & Strategy at the Rady School of Management in the University of California, San Diego, as well as Visiting Professor at the Center for Research in Experimental Economics and Political Decision-Making (CREED) at the University of Amsterdam.
Gneezy’s work has a strong empirical bent. This is perhaps due in part to the modest circumstances of his upbringing (he has written that he learned about game theory as a kid, instinctively applying it in the tough streets of Tel Aviv). In his academic research, Gneezy is renowned for his ability to think up clear and compelling experiments that reveal the underlying principles of the way psychological factors impact economic behavior. He has done this time and again, throwing light on many diverse issues, including: (i) the conditions under which incentives do and do not work; (ii) the impact of deception on competitiveness; (iii) the role of gender differences in competitiveness and other economic behavior; and (iv) the theory of behavioral pricing; among other topics.
In addition to his high-profile academic career, Gneezy has also enjoyed success as an entrepreneur. In 2014, he co-founded Gneezy Consulting, a business consulting firm that specializes in the application of insights from behavioral economics.
Gneezy is the author or co-author of more than 50 peer-reviewed journal articles and book chapters. His popular book on behavioral economics, The Why Axis (see below), co-written with John A. List (who is also profiled in this article — see below), has enjoyed great popularity and is considered by many to be one of the top books in a crowded field. Gneezy has received numerous grants and awards, and has served on the editorial boards of several academic journals, including the Journal of Economic Behavior and Organization.
12. Tim Harford
Harford was born in the county of Kent in southeastern England in 1973, but was raised near Manchester. He received a master’s degree (MPhil) in economics from Oxford University in 1998. Since leaving school, he has made his living mostly by his pen. In addition to his best-selling and award-winning books, Harford has worked as a regular columnist (“The Undercover Economist”) for Financial Times (where he still serves as a member of the editorial board), as a consultant for the World Bank’s International Finance Corporation (IFC), and as a writer and broadcaster for the BBC (both radio and television). He is currently Visiting Fellow at Oxford University’s Nuffield College.
Harford’s work has been focused on behavioral economics, and specifically on its power to improve economic outcomes and thus the lives of millions of human beings. A gifted author who writes with exceptional clarity and an abundance of everyday examples, he specializes in making the insights of academic behavioral economists available to a mass audience.
In addition to his work as a regular columnist, Harford has published articles on behavioral economics in such high-profile venues as Atlantic, Forbes, Wired, the Guardian, the Sunday Times, the New York Times, and the Washington Post. In his work as a writer and broadcaster for the BBC, Harford has presented a number of economics-based radio series, including, notably, “More or Less” (Radio 4) and, most recently, “50 Things That Made the Modern Economy” (BBC World Service). On television, he presented the popular series, “Trust Me, I’m an Economist” (BBC 2). He has also delivered TED talks (see below), and made numerous appearances on both radio and television as a guest or interviewee, including Marketplace, Newsnight, Planet Money, and the Colbert Report.
Harford is the author or co-author of some eight books aimed at a popular audience (see below). He has received many honors in the field of economic journalism, including Economics Commentator of the Year (2014), the Rybczynski Prize, awarded by the Society of Business Economists (2014--15), and the Bastiat Prize for economic journalism (2006; 2016). From 2011 until 2017, he served as a member of the Royal Economic Society council. In 2017, Harford was appointed an Honorary Fellow of the Royal Statistical Society.
13. Daniel Kahneman
Kahneman was born in Tel Aviv, Mandatory Palestine (now Israel), in 1934, during a family visit there. However, he was raised in Paris, France, where he and his parents spent much of the early 1940s hiding from the Nazis. The family settled in Israel permanently in 1948. Kahneman received his bachelor’s degree in psychology and mathematics from the Hebrew University of Jerusalem in 1954, and his Ph.D. in psychology from the University of California, Berkeley, in 1961. He is currently Professor Emeritus of Psychology and Public Affairs at Princeton University’s Woodrow Wilson School of Public and International Affairs, as well as Eugene Higgins Emeritus Professor of Psychology, also at Princeton, and Fellow of the Center for Rationality at the Hebrew University of Jerusalem. In 2002, Kahneman won the Nobel Memorial Prize in Economic Sciences, together with Vernon L. Smith (see below).
Kahneman’s pioneering work, together with that of his close collaborator Amos Tversky, in founding the field of behavioral economics in the late 1960s and early 1970s has already been discussed in the Introduction to this article, above. Tversky died relatively young, in 1996. Kahneman, however, has gone on to make outstanding contributions to the study of human behavior later in his career. Indeed, a major shift in his research had already begun to take place in the 1990s. This shift consisted in a widening of focus to the psychology of hedonics, which is the study of pleasure and its role in human behavior more generally — where the notion of “pleasure” is much broader than the notion of “utility” found in economic thinking. This body of Kahneman’s work is in many ways parallel to his earlier work in behavioral economics, only of more general application. For example, he and his collaborators discovered that when people are asked to estimate the importance of any particular factor on their overall future happiness, they tend to exaggerate it to the exclusion of other, equally important factors — a robust effect that became known as the “focusing illusion.”
Most recently, in his 2011 best-selling book Thinking, Fast and Slow (see below), Kahneman has attempted to create a grand evolutionary synthesis of human behavior by speculating that human beings evolved two different cognitive systems to meet different evolutionary needs. The first system — the fast one — helped our immediate ancestors to survive by instilling in them rough-and-ready instincts to meet real-time challenges. These instincts, which we still possess, are the source of the “irrational” factors studied by behavioral economics. The slow system developed later, with the advent of language, which gave us the luxury of reasoning in tranquility on the basis of episodic memory, counterfactual reasoning, and deliberation. The slow system is the paradigm of rationality. So, classical economics and behavioral economics are both right — they just study different cognitive systems.
Kahneman is the author or co-author of over 170 peer-reviewed journal articles and book chapters, as well as the author or editor of seven books. He has received honorary doctorates from more than 20 universities. In addition to the 2002 Nobel Memorial Prize in Economic Sciences already mentioned, Kahneman has won numerous other prizes and awards, including the Talcott Parsons Prize, the Thomas Schelling Prize, and the Frank P. Ramsey Medal. He has been elected to numerous national academies and academic associations, has been invited to lecture at universities around the world, and is the subject of a recent biography by best-selling author Michael Lewis. In 2013, Kahneman was awarded the Presidential Medal of Freedom.
14. Steven D. Levitt
Levitt was born in New Orleans, Louisiana, in 1967. He holds a Ph.D. (1994) in economics from the Massachusetts Institute of Technology (MIT). He is currently William B. Ogden Distinguished Service Professor of Economics at the University of Chicago, as well as Director of the Chicago Price Center Initiative of the Becker Friedman Institute for Research in Economics at the Booth School of Business.
Levitt’s work has focused primarily on all aspects of crime — incentives, the efficiency of illegal markets, the police and criminal justice systems, deterrence, recidivism, victims, etc. — considered from the point of view of behavioral economics. He has also investigated a range of other controversial social issues, including auto safety, the real estate market, political parties and elections, cheating in education, sports, gambling, mass shootings, race, gender, and abortion. In general, Levitt tries to analyze the true incentives at work in all of these fields, as a basis upon which to construct ameliorative policies that have a chance of working in the real world. His work has not been without controversy, especially his 2001 paper, “The Impact of Legalized Abortion on Crime,” in which Levitt and a collaborator found a statistically significant correlation between the rise in abortions and the decline in violent crimes in the US since the 1970s (presumably because potentially violent criminals were being aborted). This paper raised a storm of protest. Moreover, it was found to contain significant errors. Levitt later corrected the errors, claiming that doing so showed the original results to be weakened, but still statistically significant. Others felt the results remained impugned. The controversy eventually petered out into an inconclusive exchange of claims and counterclaims.
Levitt is undoubtedly best known to the world beyond the halls of academe for his 2005 best-selling book Freakonomics and its sequels, all co-written with journalist Stephen J. Dubner. These highly enjoyable books translate Levitt’s findings, first published in his academic papers, into funny and readable prose vignettes. One of the most striking and often-discussed of these is Levitt’s analysis of the market efficiency of the crack cocaine trade in Chicago in the 1980s and 90s (see the TED talk, below). Levitt also runs a highly popular website, also called Freakonomics.
Levitt is the author or co-author (as of 2013) of some 100 peer-reviewed journal articles, book chapters, working papers, and academic book reviews, as well as the co-author of popular four books (see below). A past Editor of the Journal of Political Economy, Levitt has won many prizes and awards, including, in 2003, the highly coveted John Bates Clark Medal awarded annually to the best American economist under the age of 40. He is co-founder of the TGG Group philanthropy.
15. John A. List
List was born in Madison, Wisconsin, in 1968. He holds a Ph.D. (1996) in economics from the University of Wyoming. List is currently Kenneth C. Griffin Distinguished Service Professor of Economics at the University of Chicago.
List’s research interests are broad, but he is perhaps best known for his work on the psychology of charitable giving and pay incentives for schoolchildren and teachers. In the former area, his much-discussed work on charitable giving called into question our understanding of the rationale for a number of widely used fund-raising techniques. For example, his research has shown that the stimulative effect of seed money on charitable giving increases monotonically with the size of the philanthropist’s contribution, as one might expect; however, the effect from increasing the amount of matching grants plateaus almost immediately, which seems counterintuitive. Other studies have found that appeals to donor altruism are far from the best way to raise money; rather, List’s team discovered that the physical attractiveness of the solicitor in a door-to-door campaign and social pressure are both far more effective.
With respect to education research, List is still conducting a multi-year, $10 million private grant he received (along with collaborators Steven D. Levitt and Roland G. Fryer, Jr. — both listed above) in 2009 to study the effects of financial incentives on the performance of both students and teachers in a new early childhood center in Chicago to be administered jointly by the University of Chicago and Harvard University. In other work, List has studied: the impact of environmental regulations on economic production and species endangerment; the systemic causes of racial and gender discrimination in market access, competitiveness, and wages; the comparative effects of gender roles in patrilineal and matrilineal societies; and various behavioral factors affecting the financial sector of the economy.
List is the author or co-author of well over 200 peer-reviewed journal articles and book chapters, as well as co-author or editor of nine or so books (see below). He has served on the editorial board, or as editor of special issues, for some two dozen academic economics journals. In addition to numerous awards, prizes, and honorary degrees, List has delivered invited lectures or keynote addresses at more than 60 colleges and universities throughout the world.
16. George Loewenstein
Loewenstein was born in the Boston, Massachusetts, area in 1955. He holds a Ph.D. (1985) in economics from Yale University. He is currently Herbert A. Simon University Professor of Economics and Psychology in the Department of Social and Decision Sciences at Carnegie Mellon University (CMU), as well as Co-Director of the Center for Behavioral and Decision Research at CMU and Director of the Roybal Pilot Program with the Center for Health Incentives and Behavioral Economics at the University of Pennsylvania’s Perelman School of Medicine.
Loewenstein’s research has focused largely on the classic behavioral economics problem of intertemporal choice. Intertemporal choice theory is of very wide practical application, affecting the decisions we make — what we are prepared and not prepared to do — in a wide range of areas: the amount of effort we put into work; the amount of money we save; how much we allocate to insurance policies; the amount of money and time we put into education; how we decide what to eat and how much to exercise; what healthcare decisions we make; and on and on. In all of these areas, Loewenstein has shown how behavioral economics — especially the concept of “hyperbolic discounting“ — can compensate for the failures of classical economic theory.
In other work, Loewenstein has been one of the principal investigators to emphasize the importance of a subject’s “state dependency” on his or her decision-making. That is, if a person is in a “hot” emotional state such as anger or sexual arousal, he or she is likely to make different choices than in a “cold” state; these choices, in turn, may affect the subject’s life in many important ways. Loewenstein has also researched the ways in which the ability of subjects to understand and properly evaluate the information available to them affects the decisions they make.
Loewenstein is author or co-author of more than 220 peer-reviewed journal articles and comments, book chapters, introductions, and encyclopedia entries, as well as several op-eds and other journalistic pieces. He is also author or editor of a half dozen academic books, including most recently a volume of his own selected essays (Exotic Preferences — see below). The recipient of numerous research grants, honorary degrees, and other awards, Loewenstein has served on the editorial board of dozens of academic journals, and has helped to organize scores of academic conferences over the years. Just since 2007, he has been keynote speaker, invited lecturer, or colloquium/seminar participant at over 170 universities around the world. A past President of the Society for Judgment and Decision Making, Loewenstein is a Fellow of the American Academy of Arts and Sciences.
17. Sendhil Mullainathan
Mullainathan was born in Chennai (formerly Madras), in Tamil Nadu state, in India, in 1972, but he grew up in the countryside. He holds a Ph.D. (1998) from Harvard University. He is currently University Professor, Professor of Computation and Behavioral Science, and George C. Tiao Faculty Fellow at the University of Chicago’s Booth School of Business.
Mullainathan has cast his net widely, writing on many traditional behavioral economics topics such as racial discrimination, government and corporate corruption, corporate governance (especially CEO salaries), labor markets, energy policy, and much more. However, he has also written on such innovative topics as the interrelationship between poverty and psychological factors. For example, in one widely discussed study Mullainathan and his coworkers found that the stresses associated with financial insecurity can measurably impair cognitive function. In another study, he found that giving workers more “self-control” in the form of voluntary contracts that penalize failure to meet production targets produces measurable increases not only in worker productivity, but in worker satisfaction, as well — presumably, due to the pleasurable sense of having greater workplace autonomy. In addition to such innovative work on the psychology of microeconomics, Mullainathan has also contributed more wide-ranging theoretical studies, such as a 2017 NBER Working Paper that provides an in-depth analysis of the very real strengths, but also the grave potential dangers, of incorporating machine learning technology into behavioral economics research.
Mullainathan is author or co-author of more than 70 peer-reviewed journal articles, book chapters, and working papers. He has received numerous grants, fellowships, and other awards, including multi-year grants from the Robert Wood Johnson Foundation, the John D. and Catherine T. MacArthur Foundation, the John Templeton Foundation, the Bill and Melinda Gates Foundations, the Sloan Family Foundation, the William and Flora Hewlett Foundation, and the National Science Foundation. A Member of the American Academy of Arts and Sciences, in 2002, Mullainathan was named a MacArthur Fellow.
18. Matthew J. Rabin
Rabin, who was born in 1963, graduated from high school in Silver Spring, Maryland. He holds a Ph.D. (1989) in economics from the Massachusetts Institute of Technology (MIT). He is currently Pershing Square Professor of Behavioral Economics at Harvard University, with joint appointments in the Economics Department and the Business School.
Rabin’s work has focused on formal models that incorporate various psychological factors into traditional game theory, and decision theory more broadly, in order to resolve many of the outstanding “paradoxes” of those fields (that is, cases in which real people do not behave as predicted on rationalist assumptions). For example, in the case of “dictator games” (defined as games in which outcomes depend only upon a player’s own actions), experiments show that people often behave in ways that are inconsistent with their self-interest. Rabin found the solution to this puzzle by introducing a “kindness function,” on the hypothesis that players attach independent value to reciprocity (being kind to those perceived as having been kind to them — and the reverse). Rabin’s theory successfully explains such empirical phenomena as: employers paying higher-than-market market; people’s willingness to volunteer their time and money; consumer resistance to prices perceived to be unfair; and so on.
In other work, Rabin has investigated the economic consequences of many additional psychological propensities, such as cognitive dissonance, risk aversion, confirmatory bias, procrastination, the gambler’s fallacy, risky behavior among youth, and addiction.
Rabin is author or co-author of some 60 peer-reviewed journal articles and book chapters, as well as co-editor of one book. He has received numerous grants, fellowships, invited lectureships, and other awards. In 2001, Rabin was named a MacArthur Fellow, and also won the John Bates Clark Medal for the best American economist under the age of 40.
19. Barry Schwartz
Schwartz was born in 1946. He holds a Ph.D. (1971) in psychology from the University of Pennsylvania, and is currently Dorwin Cartwright Professor of Social Theory and Social Action at Swarthmore College.
Schwartz works the psychological side of the street of behavioral economics, applying insights from his own field to problems involving the nature of decision-making, work, and overall well-being — as opposed to the majority of the authors on this list, who are economists by training and who seek to borrow from the academic discipline of psychology, the better to understand how economic principles work in the real world. Schwartz is best known for his work in three particular areas. First is the problem of choice. It is he who pioneered the idea, which by now has become fairly widely known, that giving people more choices does not, beyond a certain, rather low threshold, increase their sense of freedom or well-being. On the contrary, people tend to experience too many choices as paralyzing. Second, Schwartz has lent his impassioned voice to the contemporary neo-Marxist critique of capitalism. While eschewing explicit reference to Marxist theory, he argues that industrial and post-industrial civilization is the product of what he calls bad “idea technology" — what a Marxist would call “false consciousness.” Moreover, he maintains that, since human nature is culturally relative (a social construct), it is up to us to invent new ways of working that will overcome capitalist alienation and oppression. Third — seemingly in tension with his political radicalism — Schwartz has praised the classical virtues, especially practical wisdom (phronesis, or prudence) in his book by that name, as personality traits that are necessary for genuine contentment in life.
Schwartz is author or co-author of around 200 peer-reviewed journal articles, book chapters, book reviews, and op-ed pieces. He has also delivered some 40 invited lectures at various universities and conferences, as well as several TED talks. He has received numerous grants, fellowships, and other awards, and has served as Editor of four different academic journals. In 1973, Schwartz was made a Member of the American Association for the Advancement of Science (AAAS), and in 2004, he was elected a Fellow of the American Psychological Society (APS).
20. Eldar Shafir
Shafir was born in Israel in 1959. He holds a Ph.D. (1988) in cognitive science from the Massachusetts Institute of Technology (MIT). He is currently Class of 1987 Professor of Behavioral Science and Public Policy at Princeton University, with joint appointments in the Department of Psychology and the Woodrow Wilson School of Public and International Affairs. Shafir is also Inaugural Director of the Kahneman-Treisman Center for Behavioral Science and Public Policy at Princeton, as well as a Faculty Associate with the Institute for Quantitative Social Science at Harvard University.
Shafir was a close, younger colleague of behavioral economics pioneer Amos Tversky until the latter’s death in 1996. He has also been heavily involved in managing Tversky’s literary legacy, as the editor of two volumes of his mentor’s selected papers to date (see below). It is understandable, therefore, that Shafir’s early work hewed closely to the basic principles of behavioral economics as enunciated by Kahneman and Tversky in the late 1960s — namely, the study of the ways in which particular cognitive biases cause economic actors to deviate from the expectations of traditional rational choice theory. More recently, he has branched out into new areas of investigation, notably the causes and effects of people’s tendency to make decisions based on the nominal value of money, as opposed to purchasing power. Most recently, in collaborative work with Sendhil Mullainathan (see above), Shafir has begun to explore the “psychology of poverty,” which refers to the factors which appear to lead to self-defeating behavior on the part of the poor. His thesis is that there is not, in fact, any distinctive psychology that all and only poor people share. There is just the universal tendency of human beings sometimes to make bad decisions due to bounded rationality and cognitive biases. The only difference is that bad decisions have worse consequences for the poor than they do for the rich, due to the poor’s much smaller margin for error.
Shafir is author or co-author of more than 100 peer-reviewed journal articles, book chapters, and working papers, as well as author, co-author, or editor of five books. Since 2007 alone, he has given over 120 invited lectures, keynote addresses, and conference presentations. In addition to numerous honors and awards, Shafir is the recipient of more than 20 major research grants, is a member of the editorial board of nine academic journals, and is a fellow or board member of some 35 public and private foundations, academic associations, and trusts.
21. Robert J. Shiller
Shiller was born in Detroit, Michigan, in 1946. He holds a Ph.D. (1972) in economics from the Massachusetts Institute of Technology (MIT). Shiller is currently Sterling Professor of Economics at Yale University, and a Fellow with the International Center for Finance at the Yale School of Management.
Shiller’s work has focused on the financial sector of the economy — he is one of the founding fathers of “behavioral finance.” He made his reputation through meticulous, detailed empirical studies of the performance of the stock market, beginning with the lead-up to the crash of 1929, through to the present. He demonstrated that the reigning rational choice theory as applied to anticipated return on investment in the financial sector could not explain the historical data, consisting of repeated asset price bubbles and sell-offs. Rather, in order to explain the observed volatility of the stock market revealed by the historical record, he argued persuasively that emotional and psychological factors — such as fear, loss aversion, the bandwagon effect, and others — had to be taken into account. Working together with colleagues, Shiller developed a formal model incorporating some of these factors, which retroactively explained the 1987 crash and (more impressively) forecast a new stock market bubble forming in 2000. That same year, he published his findings in a popular book (Irrational Exuberance — see below). Over the next several years, Shiller issued repeated warnings that the real estate sector was the main factor driving the new stock market bubble, and that the potential consequences were very dangerous. In 2005, he even predicted a worldwide recession following the coming crash (which, of course, arrived three years later).
It was this spectacular track record explaining and predicting stock market booms and busts that cemented Shiller’s reputation. However, he has gone on to do important work in other areas of behavioral economics, such as the psychology of consumer choice (see his TED talk, below). In 2013, together with Eugene Fama and Lars Peter Hansen, Shiller was awarded the Nobel Memorial Prize in Economic Sciences.
Shiller is author or co-author of more than 140 peer-reviewed journal articles and book chapters, through 2014, as well as 10 or so books (see below). He has also published about 50 public policy and op-ed pieces in the mainstream media, in addition to writing a regular column, “Finance in the Twenty-First Century,” for the Project Syndicate website and an “Economic View” column for the New York Times. In addition to his Nobel Prize, Shiller won the Deutsche Bank Prize in Financial Economics in 2009. In 2017, he delivered the Presidential Address to the American Economic Association.
22. Vernon L. Smith
Smith was born in Wichita, Kansas, in 1927. He hold a Ph.D. (1955) in economics from Harvard University. He is currently George L. Argyros Endowed Chair in Finance and Economics, as well as Professor of Economics and Law, at Chapman University.
Smith is famous for his pioneering work in experimental economics — basically, the attempt to model universal microeconomic principles on the basis of very-small-scale markets set up in the classroom or the laboratory. The great advantage of experimental economics is that the experimenter has control over the relevant variables, so that the effects of changing a given variable on other parameters can be not only theoretically modeled, but studied directly. The techniques of experimental economics have enormous versatility, and have been used to study phenomena from markets and decision-making to bargaining, auctions, and contracts. They can also be used at a meta-level to study the outcomes of different experimental designs, the usefulness of various game-theoretic formalisms, and other theoretical issues. Smith himself is particularly known for his work on the theory of the market, especially the importance of the institutional framework within which buyers and sellers interact. By varying the rules imposed on transactions by a hypothetical institution, Smith was able to provide convincing empirical evidence of the classical liberal claim of the superior economic efficiency of the free market.
While experimental economics in and of itself does not challenge rational choice theory, but merely identifies more precisely the constraints within which economic actors must operate, Smith deserves his place on this list by virtue of his later theoretical work on the convergence of rationalist and behavioral economic approaches. Most recently, he has taken to writing in a more overtly philosophical vein on the place of psychological and economic analysis in human affairs generally (see his books Evidence of Things Not Seen and Humanomics, listed below). In 2002, Smith shared the Nobel Memorial Prize in Economic Sciences with Daniel Kahneman (see above), one of the two co-founders of behavioral economics.
Smith is the author or co-author of more than 200 peer-reviewed journal articles, book chapters, and working papers. He is also the author or co-author of eight books, as well as the co-editor of two books, one of which (Handbook of Experimental Economics Results) is a multi-volume series. He is Founder and President of the International Foundation for Research in Experimental Economics (IFREE), a Member of the Board of Advisors for the Independent Institute, and a Senior Fellow at the Cato Institute. He has served on the editorial boards of the American Economic Review, the Journal of Economic Behavior and Organization, Science, Economic Theory, the Review of Economic Design, and the Journal of Economic Methodology. The Vernon Smith Experimental Economics Laboratory (VSEEL) at Purdue University, where Smith taught for many years, is named in his honor, as is the Vernon Smith Prize for the Advancement of Austrian Economics sponsored by the European Center of Austrian Economics.
23. Philip E. Tetlock
Tetlock was born in Toronto, Canada, in 1954. He holds a Ph.D. (1979) in psychology from Yale University. He is currently Annenberg University Professor at the University of Pennsylvania (Penn), with a joint appointment in the Psychology Department and the Wharton School (Penn’s school of business and management).
Tetlock’s work has been unusually varied, often encompassing topics that have traditionally belonged to the academic discipline of political science, but upon which he has brought to bear the concepts and methods of psychology and behavioral economics. He classifies his work into five main categories:
- Defining and Assessing Good Judgment
- Accountability and Attributions of Responsibility
- Taboo Cognition and Sacred Values
- Political versus Politicized Psychology
- Hypothetical Societies and Intuitions About Justice
Under the first category, in a series of influential studies early in his career Tetlock showed that successful forecasts of public events by recognized policy experts fared little better than 50%, or chance. Indeed, he found that the better known the expert, the worse his or her forecasts, suggesting the existence of an inverse relationship between fame and accuracy! In the second category, Tetlock has argued that accountability is necessary to bind individual social actors to collective institutions, and that such binding in and of itself fosters the exercise of better judgment. Under the third heading, Tetlock has studied the great importance that most people attach to certain values held to be sacred (or taboo). Fourthly, he has studied the ways in which psychologists themselves often allow politicized or ideological thinking to color their “scientific” theorizing about human behavior in the political realm. Finally, Tetlock has introduced the use of counterfactual thought experiments to political science, and psychology more generally, as a basis for investigating the most-important factors influencing human thought and behavior, and thus people’s policy preferences, in various hypothetical situations. More specifically, he has found that our political discussions are often futile because virtually everyone’s intuitions regarding distributive justice are confused. Our intuitions are confused, in turn, because we find it difficult to separate factual assumptions about other human beings from value judgments about desirable social outcomes. Tetlock believes the hypothetical-societies approach can help to resolve some of these confusions.
Tetlock is the author or co-author of more than 260 peer-reviewed journal articles and book chapters, as well as the author, co-author, or editor of some dozen books (see below). In addition, he has been invited to deliver over 75 talks, lectures, and keynote addresses at universities and professional organizations around the United States and the world. The recipient of numerous research grants, honorary degrees, and other awards and honors, in 2009, Tetlock was named a Fellow of the American Academy of Arts and Sciences.
24. Richard H. Thaler
Thaler was born in East Orange, New Jersey, in 1945. He holds a Ph.D. (1974) in economics from the University of Rochester. Thaler is currently Charles R. Walgreen Distinguished Service Professor of Behavioral Science and Economics at the University of Chicago’s Booth School of Business.
Thaler was a somewhat younger colleague of Kahneman and Tversky, and thus among the first generation of behavioral economists. Even before meeting Kahneman and Tversky at Stanford in the 1970s, he had already compiled a list of “anomalies" — phenomena that were known to occur, but ought not to, according to mainstream rational choice theory. (This list would later become the basis of an influential column entitled “Anomalies” that Thaler would write from 1987 until 1990 for the Journal of Economic Perspectives.) When Thaler learned of Kahneman and Tversky’s work, he immediately saw that it opened up vast new possibilities for economic theory, and he set about helping them to lay the groundwork for the psychological study of decision-making, contributing several key concepts himself along the way, notably the endowment effect.
In more recent years, Thaler has focused on putting the behavioral approach to the study of decision-making into practice. To this end, he teamed up with Cass Sunstein, Administrator of the White House Office of Information and Regulatory Affairs from 2009 to 2012, to help translate the theory of “nudges” (AKA “soft paternalism”) into policy. A nudge is basically an attempt by government to shape citizens’ behavior in ways it views as desirable through psychological means, as opposed to passing laws or promulgating regulations (see Thaler and Sunstein’s Nudge, listed below). Finally, in retirement, Thaler has contributed to writing the history of the discipline of behavioral economics, especially with his 2015 memoir, Misbehaving. Interestingly, Thaler acknowledges that his main impact was always on the younger generation of up-and-coming economists, rather than on his own colleagues, noting wryly in an interview:
Behavioral economics isn’t controversial if you’re under 40. I haven’t changed a single person’s mind. All I’ve done is corrupt the youth.
In 2017, Thaler was awarded the Nobel Memorial Prize in Economic Sciences (sole recipient).
Thaler is the author or co-author of over 100 peer-reviewed journal articles and book chapters, as well as author, co-author, or editor of a half-dozen books. He has received numerous honors and awards, including election as a Member of the American Academy of Arts and Sciences and as President of the American Economics Association. Several prestigious universities, including notably Erasmus University in Rotterdam, have bestowed honorary doctorates upon him. Thaler has been a Visiting Scholar, Visiting Fellow, or Visiting Professor at more than a dozen universities and think tanks, including, in 1998, the Center for Advanced Study in the Behavioral Sciences at Stanford University.
25. Kathleen D. Vohs
Vohs, who was born in 1974, grew up in North St. Paul, Minnesota. She holds a Ph.D. (2000) in psychological and brain sciences from Dartmouth College. Vohs is currently Distinguished McKnight University Professor and Land O’Lakes Chair in Marketing at the University of Minnesota’s Carlson School of Management.
Vohs has worked in a number of different fields of behavioral finance and behavioral economics, including the psychology of the self and identity, the effects of choices, the psychology of money, and the economic principles of heterosexual sexual relations. Under the first rubric falls her important work on the theory of self-regulation, which attempts to understand such patterns of behavior as impulsive spending, overeating, making a bad first impression, etc. She has also studied the processes through which personal identity is constructed and maintained, helping to explain such phenomena as high and low self-esteem. Perhaps most intriguing for a lay audience, Vohs has pioneered the study of “sexual economics,” meaning heterosexual sexual relations studied through the lens of behavioral economics (see the video clip, below). Much of Vohs’s research in all these areas has been pursued in collaboration with the noted social psychologist, Roy F. Baumeister.
Several years ago (while still in her thirties), Vohs began to turn her attention to even more ambitious projects, especially, the way we think about free will and moral desert. On this topic, see the volume she co-edited in 2010 with Baumeister and the distinguished philosopher Alfred R. Mele, Free Will and Consciousness, as well as her 2014 Scientific American article, for which she won the Sir John M. Templeton Foundation’s Free Will Essay Prize. In the latter piece, she avoids coming down conclusively in favor of a particular position in the philosophical debate on free will (strong determinism, compatibilism, or libertarianism). However, she presents a good deal of empirical evidence that:
. . . the more people doubt free will, the more lenient they become toward those accused of crimes and the more willing they are to break the rules themselves and harm others to get what they want.
Vohs concludes that belief in free will, or something like it, may be indispensable for the survival any ordered society.
Vohs is the author or co-author of more than 100 peer-reviewed journal articles and book chapters, as well as the co-editor of six books (one of which is in its third edition). She has also delivered nearly 150 presentations, talks, and invited lectures around the US and the world. She sits on the editorial board of a half-dozen economics journals, is a Member of many professional organizations in her field, including the American Psychological Association, and has organized a number of professional conferences. The recipient of a baker’s dozen of research and conference grants, as well as many other wards and prizes, in 2014 Vohs was awarded the Anneliese Maier Research Award bestowed by the German Ministry of Research and Education’s Alexander von Humboldt Foundation.
The Behavioral Economics Revolution
In summary, while behavioral economics is certainly a “hot topic” on today’s intellectual scene, it is by no means a passing intellectual fad. It has already wrought a sea change in the way economists think and practice their trade, and at this point it is hard to imagine that the profession will ever return to the old rational-choice worldview and methodology.
How does the behavioral economics revolution impact prospective students?
Once upon a time, the path toward a career as an economist could not have been more straightforward:
- Major in economics as an undergraduate
- Get some higher mathematics under your belt
- Seek admission to one of the many Ph.D. programs in economics on offer around the country
The fact that the majority of the men and women on this list have Ph.D.s in economics and are housed academically in economics departments attests to the efficacy of this simple formula.
Today, however, serious change is underway, which means that other formulas are possible. On the other hand, the change has not yet taken hold everywhere. The rational-choice paradigm is still taken for granted in perhaps the majority of institutions of higher learning even now. But there is little doubt that the new viewpoint is continuing to make rapid inroads professionally. To commit oneself to behavioral economics is to be “on the side of history,” if anything is.
For prospective students, this means that many new avenues into a career as an economist are now opening up. Most of the people on this list who were not trained as economists were trained as psychologists — and most of them are relatively young, as well. So a degree in psychology is fast becoming an accepted new way into the economics discipline.
However, given that we remain in a transitional period, for the time being anyone who wishes to pursue a career path in behavioral economics is going to need to think strategically. The following formula is one suggestion for how to go about this, depending on where you wish to study:
- Decide what colleges or universities you might be interested in attending for graduate school
- Research the economics departments of those schools, with an eye to determining how behavioral-economics-friendly (or -unfriendly) they are (you can do this by looking at the faculty members, their degrees, their publications, and so forth)
- For more mainstream departments, try to figure out how to sneak some psychology courses into your undergraduate coursework, without stinting on the more old-fashioned economics courses you will need to gain admission to those graduate programs
The pioneers on this list managed to invent the field of behavioral economics, even though they themselves underwent a traditional training in economics. So you should not let the necessity to take some old-fashioned, rational-choice-style courses along the way dampen your enthusiasm about being a part of the behavioral economics revolution!
1. Smith’s Wealth of Nations was first published in 1776; Bernard Mandeville had already made much the same observation in his 1714 Fable of the Bees (as is attested by his subtitle, Private Vices, Public Benefits). The point is not so much priority (they are vastly different writers: Mandeville is crude and bumptious, whereas Smith is learned and philosophically sophisticated), as the fact that by the early eighteenth century the idea of applying psychology to economic behavior was already “in the air.”
2. The biggest bombshell was contained in a brief 1974 article in Science, summarizing their work up to that time: Amos Tversky and Daniel Kahneman, “Judgment under Uncertainty: Heuristics and Biases,” Science, 1974, 185: 1124 — 1131.
3. For example, in Daniel Kahneman and Amos Tversky, “Prospect Theory: An Analysis of Decision under Risk,” (PDF) Econometrica, 1979, 47: 263 — 292.
4. George A. Akerlof, “The Market for ‘Lemons’: Quality Uncertainty and the Market Mechanism [PDF],” Quarterly Journal of Economics, 1970, 84: 488 — 500.
5. George A. Akerlof, ““Behavioral Macroeconomics and Macroeconomic Behavior: Nobel Prize Lecture” (Stockholm University, December 8, 2001).
6. “Hyperbolic discounting” refers to a kind of time discounting, which is the amount by which the future value of something is reduced in comparison to its present value, given that human beings have a built-in preference for immediate over delayed gratification. In hyperbolic discounting — which is a fundamental finding of behavioral economics — the relation of discounting to time is not time-invariant, since proportionally more discounting takes place in the near term and less in the long term. In contrast, mainstream economic theory assumes exponential discounting, which is time-invariant, meaning that all times are discounted proportionally equally. Field studies, however, show that both human and animal behavior fits the hyperbolic model more closely.
7. Max Ehrenfreund, “Black economics medalist on ‘acting white’: ‘I didn’t want to be singled out as anything’” (Washington Post website, April 30, 2015).
9. For Glimcher’s work on the neurobiology of eye movement, see his later review article, Paul W. Glimcher, “The Neurobiology of Visual-Saccadic Decision Making,” Annual Review of Neuroscience, 2003, 26: 133 — 179.
11. Joseph W. Kable and Paul W. Glimcher, “The neural correlates of subjective value during intertemporal choice,” Nature Neuroscience, 2007, 10: 1625 — 1633.
12. Melissa Dahl, “Behind the Scenes of an Audaciously Ambitious Social-Science Project” (The Cut website, March 10, 2016).
13. Uri Gneezy, Stephan Meier, and Pedro Rey-Biel, “When and Why Incentives (Don’t) Work to Modify Behavior,” (PDF) Journal of Economic Perspectives, 2011, 25(4): 191 — 210.
15. Uri Gneezy, Muriel Niederle, and Aldo Rustichini, “Performance in Competitive Environments: Gender Differences,” (PDF) Quarterly Journal of Economics, 2003, 118: 1049 — 1074.
17. Michael Lewis, The Undoing Project: A Friendship That Changed Our Minds. New York: W.W. Norton and Co., 2016.
19. John A. List and David Lucking-Reiley, “The Effects of Seed Money and Refunds on Charitable Giving: Experimental Evidence from a University Capital Campaign,” Journal of Political Economy, 2002, 110: 215 — 233.
20. Dean Karlan and John A. List, “Does Price Matter in Charitable Giving? Evidence From a Large-Scale Natural Field Experiment,” NBER Working Paper No. 12338, June, 2006.
21. Craig Landry, Andreas Lange, John A. List, Michael K. Price, and Nicholas G. Rupp, “Toward an Understanding of the Economics of Charity: Evidence from a Field Experiment,” NBER Working Paper No. 11611, September, 2005.
22. Stefano DellaVigna, John A. List, and Ulrike Malmendier, “Testing for Altruism and Social Pressure in Charitable Giving,” Quarterly Journal of Economics, 2012, 127: 1 — 56.
23. “Anne and Kenneth Griffin Provide $10 Million for Multi-Year Study on School Improvement” (PDF) (UChicago website, October 8, 2009).
24. “Intertemporal choice” refers to the differing values human beings attach to benefits expected at different times in the future, based on the fact that we prefer to received benefits sooner rather than later. The study of intertemporal choice is based on the notion of “utility discounting,” which studies the reduced present value (“utility”) that people attach to expected future benefits. In classical economics, it was assumed that whatever discounting applied in a given situation would continue to apply to future times at various distances from the present in a linear, or proportional, manner. However, the first generation of behavioral economists (Kahneman, Tversky, Thaler, and others) showed that in real life people do not evaluate their future expected benefits in this neat and tidy way. Basically, they found that threshold effects disturb the linearity of the utility discounting function, meaning that the short-term future has a much stronger effect on people’s utility discounting than the long-term future does. In technical terms, this non-proportional (non-time-invariant) type of discounting is called “hyperbolic,” as opposed to the “exponential” discounting assumed by the classical model (see footnote 6, above).
28. For example, see Vernon L. Smith, “Behavioral Economics Research and the Foundations of Economics,” Journal of Socio-Economics, 2005, 34: 135 — 150.
29. Related to loss aversion, the endowment effect is the tendency of people to be willing to pay a higher price to keep something they already have than they would be willing to pay for the very same thing in the first place.
30. “The Battle Between Behavioral and Rational Economics: Interview with Richard Thaler” (Bloomberg website, June 4, 2015).
31. Azim F. Shariff and Kathleen D. Vohs, “The World without Free Will: What Happens to a Society That Believes People Have No Conscious Control over Their Actions?,” Scientific American, June, 2014, 310(6): 77 — 79.
32. Ibid.; p. 79.
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