Behavioral and Experimental Economics Do Inform Public Policy

Experimental and behavioral economics are well-established branches of economic science. This essay presents and discusses some results and behavioral regularities from these fields, which are of potential and actual importance for public policy. After a brief introduction to what experimental and behavioral economics are, some important behavioral regularities - presentation and framing effects, prosocial behavior, and reciprocity - are introduced, and it is reported how they interact with prominent trading institutions, taxation, and social and individual well-being. Throughout, some implications for public policy are discussed.