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.
The insights of behavioral economics are assisting corporations across the world to improve employee productivity and hiring and promotion policies, increase efficiency of marketing and investment strategies. Similarly, Governmental bodies of various countries are introducing behavioural interventions and nudges to improve public policy outcomes in the context of tax compliance, retirement planning and charitable behavior.
Experimental Economics has offered unprecedented power to test human behavior in a controlled laboratory setting or in the field. Carefully designed experiments have contributed significantly to the advancement mainly in development and behavioural economics.
The Gokhale Institute Of Politics And Economics establishes the Centre for Behavioral Economics with the vision of teaching the subject in scientific way and conducting evidence-based behavioural research to transform society.
The Centre for Behavioral Economics aims to
- Develop expertise in the subject among students, researchers and professionals
- Develop research capacities to augment the subject knowledge
- Inform and influence public policies