Criticism Of Behavioural Economics: Attacks Towards Ideology, Evidence And Practical Application

Abstract

During the last few decades the field of behavioural economics has been forming incorporating insights from psychology in economics. Behavioural economics has been growing and gaining increasing importance both as an academic discipline and a practically applicable approach suggesting the use of nudging technique. However, rise of the field is accompanied with criticism towards the field. This study explores the existing criticism of behavioural economics: summarizes, structures, offers brief analysis of the criticism and some possible responses. Ideological criticism, evidence suspicious criticism and criticism concerning practical application of behavioural economics in public policy by nudging has been covered. An overview of the criticism has been presented. According to the analysis substantial part of the criticism towards behavioural economics does not endanger general validity and significance of the field. This refers to criticism addressed towards field-specific characteristics, which are logical at the stage of the development, criticism towards “bad behavioural economics” or simply week criticism. Though, several issues raised against behavioural economics require careful further investigation and improvements. Most notably, further studies regarding different aspects of perception of what is rational behaviour, evidence suspicious approach regarding possibly overstated research results, and development of a clear framework for usage of nudges in public policy would be of value. The present study is contextual, based on literature review, and attempts to add value by offering an analytical overv