Economic Psychology
From 24th till 26th of September on the base of the ILSCR, the short training course “Economic Psychology” took place. The course was a part of the training program of the ILSCR “Advanced theory and methodology in social sciences”.
The lecturers were Marcel Zeelenberg, PhD, Head of the Department of Social Psychology, Tilburg University, and Seger Breugelmans, PhD, Professor at Tilburg University, Netherlands. The audience of the course consisted of member of ILSCR, lecturers of Department of Organizational Psychology, staff of other HSE faculties, and students of Master program “Applied Social Psychology”. The course was also attended by students of master program “Psychology in Business”.
Economic psychology has been created on border line of two disciplines, economics and psychology. It examines issues of economic behavior and explores ways of influence of economic factors on society. Lecturers presented in the course five topics to provide to the audience basics of economic psychology and teach them to take into account as researchers economic realities in studying the behavior of individuals.
The first topic highlighted representations of rational behavior in economics. This tradition dates back to the works of Adam Smith and his understanding of “rational economic man”. Classical economic theory assumes that rational person has stable preferences, driven by self-interests (greed), has unlimited will-power and complete information about the market. This doesn’t take into account the role of emotions and questions of fairness. M. Zeelenberg and C. Breugelmans presented some examples of researches, which refute theory of “rational economic man”.
In next topic teachers considered issues of estimating losses and profits, depending on various conditions. Together with the audience, they did some exercises and viewed results from perspective of Prospect Theory (Daniel Kahneman & Amos Tversky, 1979). Lecturers also presented theory of Mental Accounting (R. Thaler, 1980). According to this theory, every person has multiple mental accounts, each of which is established under a certain goal. It is proved that people prefer to mentally divide the profits (this makes them happier) and combine losses (reduces frustration).
The third topic was devoted to hyperchoice. Main research question here is following: lots of choice is good or bad? Researchers believe that less is better. As evidence M.Zeelenberg and S. Breugelmans presented researches on consumer intentions (the more choices were, the less people buy).
Following units have been devoted to issues of fairness in economic behavior, development of social value orientation (pro-social and pro-self), consideration the phenomenon of altruism, as well as the role of emotions in decision making. Lecturers gave examples of theoretical approaches and researches refuting tenets of classical economic theory of complete rationality and impartiality of choice.