This paper extends previous work presented at the SABE/IAREP conference at St Mary’s University, Halifax (James, 2009). In the earlier paper it was shown that conventional economic theory is used to make the case for tax reform but does not always adequately incorporate all the relevant...

The aim of this paper is to illustrate a few aspects related to the shortcomings of the mainstream economics, and its unrealistic theoretic assumptions, as it completely failed to anticipate the current economic crisis. In the same time we intend to highlight the much more realistic theories...

How does overconfidence arise and persist in the face of experience and feedback? We examine experimentally how individuals' beliefs about their absolute, as opposed to relative, performance on a quiz react to noisy, but unbiased, feedback. Participants believe themselves to have received...

Beyond the classical reasons of efficiency, commitment, the distribution of information, or incentive provision, a person may also delegate decision rights so as to avoid blame for an unpopular or immoral decision. We show that by delegating to an intermediary, a dictator facing an allocation...

Neuroeconomics shares the main goals of microeconomics: to understand what causes choices, and the welfare properties of choice. The novel goal is linking mathematical constructs and observable behavior to mechanistic details of neural circuitry. Several complementary methods are used. An...

In this experiment I study a novel three-player ultimatum game in which two proposers with unequal amounts of money simultaneously submit offers to one responder, who may accept at most one offer. I compare the predictions of inequity aversion, advantage seeking, and self-interest. Unlike...

Behavioral economics has shaken the view that individuals have well-defined, consistent and stable preferences. This raises a challenge for welfare economics, which takes as a key postulate that individual preferences should be respected. This paper scrutinizes the challenge and argues, in...

This review identifies subjective decision-making processes related to management accounting (MA) and uses these processes as a basis for organizing psychology-based research on MA. For each decision process we identify families of related psychology models that have supported robust...

Finance is in the midst of a paradigm shift, from a neoclassical based framework to a psychologically based framework. Behavioral finance is the application of psychology to financial decision making and financial markets. Behavioralizing finance is the process of replacing neoclassical...