Fear and loathing no more: The emergence of collaboration between economists and psychologists

Abstract

Psychologists and economists used to see the world from their own perspectives, but currently we observe a growing common perspective, called behavioral economics or economic psychology. Traditional differences between economists and psychologists concerned self-interest and rationality of people. Psychologists now are interested in the economists’ perspective, at least as a benchmark for actual behavior. Economists have now accepted that heuristics and biases are not idiosyncratic deviations but structural parts of human decision making. The experimental approaches in psychology and economics are also converging. A common language, mutual understanding and more collaboration between economists and psychologists are developing.