Uwe Dulleck

• October 22, 2018
• Speaker: Uwe Dulleck
  
• Topic: The Case for (Economic) Theory in the Age of Behavioural Economics
  

Behavioural Economics is often seen as theoretical economics, in this seminar I want to argue for two cases, that economic theory should play for behavioural economics and its application in public policy and regulation. I argue that the role of behavioural economics is to combine the normative strength of economic theory with insights from behavioural sciences. Economic theory can serve to provide the benchmark of rational behaviour that allows to identify, where possible, behavioural biases in economic decisions. In this regard, it is necessary to identify situations where behavioural economic policy interventions are likely to achieve behavioural changes and where standard economic instruments should be used. As an example I consider arguments about transitive preferences and the implications for financial regulation.

Taking behavioural insights seriously in theoretical economic analysis provides the second role for economic theory. In doing so, economic theory can provide insights into the robustness of economic institutions and regulation.