Some Methods in Psychological Economics

Abstract

Since the first volume of the Journal of Economic Psychology was published in 1981 many researchers interested in the engagement of economics and psychology have used the pages of the new journal to present empirical results from experiments, interviews, and questionnaire studies. These researchers share an interest in the human aspect of economic affairs; this can take many forms. A useful distinction made for this area (but not necessarily by the Journal of Economic Psychology) is between “psychological economics” and “economic psychology”: the former refers to the “psychologizing” of economics and the latter to the extension of the study of human behavior to include economic behavior (for example, Furnham and Lewis, 1986). Thus psychological economics (or behavioral economics) is concerned with forwarding what the converted see as a more comprehensive economic discipline where economic predictions may be improved. This follows the tradition set by George Katona and his work on psychological economics. On the other hand, economic psychology makes no such claim; the main thrust is the idea that studying the economic realm can increase our understanding of human behavior, and that such an endeavor is sufficient justification (and a big enough challenge) as it stands. This chapter is generally concerned with psychological economics and the tools that researchers use in going about their business.