Twenty years ago, behavioral economics did not exist as a field. Most economists were deeply skeptical--even antagonistic--toward the idea of importing insights from psychology into their field. Today, behavioral economics has become virtually mainstream. It is well represented in prominent journals and top economics departments, and behavioral economists, including several contributors to this volume, have garnered some of the most prestigious awards in the profession.

This book assembles the most important papers on behavioral economics published since around 1990. Among the 25 articles are many that update and extend earlier foundational contributions, as well as cutting-edge papers that break new theoretical and empirical ground.

"Advances in Behavioral Economics" will serve as the definitive one-volume resource for those who want to familiarize themselves with the new field or keep up-to-date with the latest developments. It will not only be a core text for students, but will be consulted widely by professional economists, as well as psychologists and social scientists with an interest in how behavioral insights are being applied in economics.

The articles, which follow Colin Camerer and George Loewenstein's introduction, are by the editors, George A. Akerlof, Linda Babcock, Shlomo Benartzi, Vincent P. Crawford, Peter Diamond, Ernst Fehr, Robert H. Frank, Shane Frederick, Simon Gachter, David Genesove, Itzhak Gilboa, Uri Gneezy, Robert M. Hutchens, Daniel Kahneman, Jack L. Knetsch, David Laibson, Christopher Mayer, Terrance Odean, Ted O'Donoghue, Aldo Rustichini, David Schmeidler, Klaus M. Schmidt, Eldar Shafir, Hersh M. Shefrin, Chris Starmer, Richard H. Thaler, Amos Tversky, and Janet L. Yellen."

This collection explores the subject of conflicts of interest. It investigates how to manage conflicts of interest, how they can affect well-meaning professionals, and how they can limit the effectiveness of corporate boards, undermine professional ethics, and corrupt expert opinion. Legal and policy responses are considered, some of which (e.g. disclosure) are shown to backfire and even fail. The results offer a sobering prognosis for professional ethics and for anyone who relies on professionals who have conflicts of interest. The contributors are leading authorities on the subject in the fields of law, medicine, management, public policy, and psychology. The nuances of the problems posed by conflicts of interest will be highlighted for readers in an effort to demonstrate the many ways that structuring incentives can affect decision making and organizations' financial well-being.

One area in which Loewenstein has made a major contribution is in the analysis of how individual preferences are formed: whether they can be predicted and the extent to which they are influenced by emotion rather than reason. This volume presents a selection of his most influential papers with an introduction which provides an historical overview of the concept of preferences, summarizes his papers, and places them in the context of the literature.

One area in which Loewenstein has made a major contribution is in the analysis of how individual preferences are formed: whether they can be predicted and the extent to which they are influenced by emotion rather than reason. This volume presents a selection of his most influential papers with an introduction which provides an historical overview of the concept of preferences, summarizes his papers, and places them in the context of the literature.

This collection explores the subject of conflicts of interest. It investigates how to manage conflicts of interest, how they can affect well-meaning professionals, and how they can limit the effectiveness of corporate boards, undermine professional ethics, and corrupt expert opinion. Legal and policy responses are considered, some of which (e.g., disclosure) are shown to backfire and even fail. The results offer a sobering prognosis for professional ethics and for anyone who relies on professionals who have conflicts of interest. The contributors are leading authorities on the subject in the fields of law, medicine, management, public policy, and psychology. The nuances of the problems posed by conflicts of interest will be highlighted for readers in an effort to demonstrate the many ways that structuring incentives can affect decision making and organizations' financial well-being.

Philosophers have long tussled over whether moral judgments are the products of logical reasoning or simply emotional reactions. From Jane Austen s Sense and Sensibility to the debates of modern psychologists, the question of whether feeling or sober rationality is the better guide to decision making has been a source of controversy. In Do Emotions Help or Hurt Decision Making? Kathleen Vohs, Roy Baumeister, and George Loewenstein lead a group of prominent psychologists and economists in exploring the empirical evidence on how emotions shape judgments and choices. Researchers on emotion and cognition have staked out many extreme positions: viewing emotions as either the driving force behind cognition or its side effect, either an impediment to sound judgment or a guide to wise decisions. The contributors to Do Emotions Help or Hurt Decision Making? provide a richer perspective, exploring the circumstances that shape whether emotions play a harmful or helpful role in decisions. Roy Baumeister, C. Nathan DeWall, and Liqing Zhang show that while an individual s current emotional state can lead to hasty decisions and self-destructive behavior, anticipating future emotional outcomes can be a helpful guide to making sensible decisions. Eduardo Andrade and Joel Cohen find that a positive mood can negatively affect people s willingness to act altruistically. Happy people, when made aware of risks associated with altruistic acts, become wary of jeopardizing their own well-being. Benoit Monin, David Pizarro, and Jennifer Beer find that whether emotion or reason matters more in moral evaluation depends on the specific issue in question. Individual characteristics often mediate the effect of emotions on decisions. Catherine Rawn, Nicole Mead, Peter Kerkhof, and Kathleen Vohs find that whether an individual makes a decision based on emotion depends both on the type of decision in question and the individual s level of self-esteem. And Quinn Kennedy and Mara Mather show that the elderly are better able to regulate their emotions, having learned from experience to anticipate the emotional consequences of their behavior. Do Emotions Help or Hurt Decision Making? represents a significant advance toward a comprehensive theory of emotions and cognition that accounts for the nuances of the mental processes involved. This landmark book will be a stimulus to scholarly debates as well as an informative guide to everyday decisions."