Convergence Of Behavioral Economics And Orthodox Economic Theory

Abstract

In recent decades, more and more attention is paid to the research of influence of social and cognitive factors on economic decision-making, both on the individual level and on organizational one. The new challenge of modern era is an integration of the key areas of factual and psychological data analysis and their impact on small and large-scale economic phenomena, which results in emergence of a new scientific discipline called "behavioral economics". The main purpose of the research is how to distinguish the orthodox view in economic theory and the newly-born branch - behavioral economy. In the recent paper we state the features of the behavioral economics in contrast to the orthodox economic theory, define the origins of the paradigm, analyze the specifics of the research methods used by the new scientific direction. Also, the specific of terminology of the theory and the role of an economic agent in these two areas of economic theory are determined. And finally, main challenges of behavioral science are revealed and ways of how it can enrich economic theory are shown. Main conclusion says that there is a significant improvement in the predictive capabilities of the theory due to new direction of economic science on the one hand, and on the other hand, economic theory can expand on a field of phenomena that were not previously involved in the consideration by economists.