Markets, Productivity, and Happiness in a Historical Perspective

Three ways of becoming behavioral. Economic theory of decision making meets cognitive psychology (1966-1972)

Lenfant Jean-Sébastien, Université Paris 1 Panthéon-Sorbonne

The aim of the contribution is to discuss three more or less independent research topics in the psychology of choice and decision in the 1960s and to discuss the proper contribution of each and their methodological interplay to the fermentation of behavioral economics. The first research topic deals with attitudes toward risk. To psychologists interested in the von Neumann-Morgenstern-Savage model, the issue of defining and measuring risk and risk perception is an important step towards criticizing the SEU model (Slovic, 1966; Tversky, 1967, Pollatsek & Tversky, 1970). The model will be contrasted with a deep questionning about the meaning of risk and the vagaries of behaviors in the face of uncertain events. The second research topic deals with intransitivity, a topic dating back to Georgescu-Roegen (1936), that became a subject of theoretical inquiry (vs empirical inquiry) in the 1960s, especially through Tversky's 1969 article "Intransitivity of Preferences". The third topic of interest is preference reversal. It developed as an independent topic in the late 1960s, with some linkage to Festinger's cognitive dissonance theory and with distinctive experimental evidence by Lichtenstein and Slovic (1971). The aim of the contribution is to wonder if there is any methodological and conceptual interplay between the methods, goals and interpretations running through these separate objects of study, and to examine to what extent they reinforced each other in providing the basis for behavioral economics as a branch of psychology that could not remain outside economics.


Keywords: behavioral economics, psychology, risk, intransitivity, preference reversal