Behavioral Economics - Sp 11

INTRO:Existing uncertainties about the correct explanations for economic growth and business cycles cannot be settled by aggregative analysis within the neoclassical framework. Current disputes in theory rest largely on departures from perfect rationality under uncertainty.The distinction between risk and uncertainty is fundamental in Post Keynesian economics, as it was in the economic thinking of John Maynard Keynes. While risk can be quantified, uncertainty simply cannot be quantified. Behavioral economics adresses uncertainty and risk respectively using two different theories non-expected utility theory and utility choice theory. We will use the behavioral literature of authors such as Camerer, Knight, Akerloff, Starmer, Zak, and Wray.