Behavioral economics: implications for economic theory and policy

Abstract

The concerns of behavioral economics are considered in the context of the decentralized, private ownership market economy. Modes of adaptive economizing behavior are outlined and their implications for augmenting the classical paradigm outlined. The role of viability mechanisms that indirectly and adaptively coordinate producers and consumers out of equilibrium is emphasized. The destabilizing nature of the creative intelligence and adaptive economizing transforms the world. The example of internal combustion, its effect on agriculture and transportation and the corollary use of resources provides a timely example.