Summary: The workshop will address how economic forces and psychological processes interact both at a micro level and a macro level. This workshop seeks to advance the insights gained by incorporating psychological aspects into the analysis of economic questions. While this can be done by theoretical modelling, the workshop’s emphasis is on empirical research. Among the central issues that may be addressed in this workshop are: • In what areas of the economy and for what economic problems can the working of psychological effects be empirically identified? Where are these effects large, and in which situations can they be disregarded? • Under what conditions do psychological processes render the standard neoclassical economic model of little use, or cause it to make wrong predictions? • What is the contribution of happiness research to economics (e.g. identifying systematic errors in human decision-making)?

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