A recursive correlation between economy and psychology: A specific focus on the new corporate governance theory

Type :

Case study

Pages :

12 pages

Format :

.doc

Published date :

01/16/2009

Category :

Business & market

Sub category :

Management

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Summary :

Introduction.
Economists versus psychologists: A prejudicial opposition.
1. A prejudicial opposition.
2. How economists have understood the limits of their theories and the underlighted anomalies.
3. Economical flexibility and adaptation: How to integrate psychological and behavioural conclusions in economical models.
Psychological and behavioural research design the economical field.
1. A new corporate governance theory.
2. Interests of a new governance model.
3. Influence of behavioural researchers.
Conclusion of the article.
The perspectives of behavioural corporate governance.
References.

Abstract

It has always been an intrinsic issue of economy: accused of being disconnected from individuals' reality, this science has been attacked for long times, by various researchers and experts, such as psychologists. And effectively, a plethora of arguments have been provided for integrating greater psychological realism in economics, in order to improve it. Over the years, searchers such as Danny Kahneman, Amos Tversky, Richard Thaler, and more recently Colin Camerer and George Loewenstein, have set in doubts some of the basis of mainstream economics, demonstrating it as psychologically unrealistic. This claim for greater psychological consideration and realism is now providing results and a new science has been defined, in order to combine properly those two fields. Called "Behavioral Economics" or 'Economic psychology", this enhances the profound efforts which has been done to capture and integrate psychologically more realistic aspects of human nature into economic science. And moreover, this science of behavioral economics has also been introduced in the daily economy and in the micro level of organizations, through corporate models, for instance.