Human Behavior and the Economy

Modeling human behavior as if it resulted from conscious optimization by agents with well-defined goals and motives is convenient and powerful. However, such modeling often turns out to be overly simplistic and too narrow to provide a good understanding of how consumers, workers, or management in fact behave. We use experimental methods to test when the standard model is adequate. And when we find it is not, we develop behavioral theory to account for human error, fear, greed, and judgmental bias. Such an approach benefits research from "behavioral finance" to marketing, personnel, strategy, organization, and economic sociology.