Behavioral Economics offers realistic psychological foundations to economic decisions and can increase the explanatory power of economic theories. Adam Smith and John Maynard Keynes were among the pioneers who discussed path-breaking concepts in behavioral economics like lack of self-control, pain of loss, overconfidence. The subject regained its power after the Nobel Prize winners Daniel Kahneman, Amos Tversky and Richard Thaler empirically explained various anomalies in standard economic and finance theories with the help of psychology and other behavioral sciences. The insights of behavioral economics are regularly incorporated by corporate houses, government departments and social scientists to understand the problem areas and to formulate behaviorally informed policy in various domains. Experimental Economics has offered unprecedented power to study human behavior in a controlled laboratory or field setting.
The Gokhale Institute of Politics and Economics established the Centre for Behavioral Economics in 2018 with the vision of creating teaching and research capacity in the area of Behavioral Economics and Behavioral Finance and conducting evidence-based behavioral research to address socio-economic policy questions.
The Centre for Behavioral Economics aims to
1) Develop expertise in the subjects among students, researchers and professionals
2) Develop research capacities to augment the subject knowledge
3) Assist in designing Behavioral public policies