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Behavioural Economics lacks an agreed definition, but a good example is provided by Mullainathan and Thaler (2000: 1): “the combination of psychology and economics that investigates what happens in markets in which some of the agents display human limitations and complications.” Natural Decision Making involves experienced decision makers in field settings where decisions are not routine. These are investors and managers, airline pilots and fire chiefs whose decisions involve a struggle with complexity, lack of data and poorly known risks. Their decisions have urgency, immediacy and serious consequences. According to Meso et al. (2002: 64) natural decision making is “how people use their experience to make decisions in complex, dynamic real-time environments.”
A still tentative alternative view comes from Berg (2003: 412) who argues that “major themes in behavioural economics... now fit comfortably into most major journals in economics... [although] it has not been accompanied by a new normative framework for analysing policy.”
There is a longstanding association between finance and biology. Malthus (1798, reprinted 1973) linked the biology of population growth to the economics of natural resource supply; Schumpeter (1939) adopted a Darwinian view of business cycles with his description of capitalist development as an evolutionary process incorporating natural selection and punctuated equilibria. Nelson and Winter (1982) arguably popularised the modern association between evolution and economics, and encouraged Hodgson (1995) to collect 30 key papers charting the post-1950 emergence of biological analogies in economics.
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(2006). Introduction. In: Why Managers and Companies Take Risks. Contributions to Management Science. Physica-Verlag HD. https://doi.org/10.1007/3-7908-1696-5_1
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