The present work examines the evolutionary theories set forth by Armen Alchian in his 1950 paper, Uncertainty, Evolution and Economic Theory; and furthered by Geoffrey Manne and Todd Zywicki in their recent paper titled Uncertainty, Evolution, and Behavioral Economic Theory. Alchian's thesis relied on an evolutionary understanding of firms' activities in the context of uncertain settings, analyzing it through the lenses of 'evolution' and 'natural selection' in order to contend that for firms to 'survive' in the market, they would need to act 'as if' they are oriented towards profit maximization, regardless of whether or not they actually are. There are three underlying propositions in the present study: (i) Material rational behavior may not be automatically discarded in an environment where 'uncertainty' and 'asymmetry of information' are constant factors. (ii) Allocative efficiency may be influenced by a flux of environmental, individual and behavioral inputs, which are expressed in the prioritization sets that economic actors establish in order to formulate their utility functions. (iii) Manne & Zywicki's posture against the inclusion of volitive elements in Antitrust Enforcement is essentially wrong, as proven by analyzing the role of 'procompetitive justifications' in the enforcement of Antitrust rules. In sum, the present work concludes that Alchian's evolutionary theory does not account for the interpretation that economic actors render to the inputs generated in their respective market environments. Even as empirical models may render useful biases that positively inform the conduct of economic actors, the use of conventional analytical tools in a world of uncertainty and incomplete information does not account for a consistent formulation of useful predictions in ever-changing market environments.

This first volume of The Foundations of Behavioral Economic Analysis covers the opening topic found in this definitive introduction to the subject: the behavioral economics of risk, uncertainty, and ambiguity. It is an essential guide for advanced undergraduate and postgraduate students seeking a concise and focused text on this important subject, and examines how the decision maker chooses his optimal action in the presence of risk, uncertainty, and ambiguity. This updated extract from Dhami's leading textbook allows the reader to pursue subsections of this vast and rapidly growing field and to tailor their reading to their specific interests in behavioural economics.

This is the first definitive introduction to behavioral economics aimed at advanced undergraduate and postgraduate students. Authoritative, cutting edge, yet accessible, it guides the reader through theory and evidence, providing engaging and relevant applications throughout. It is divided into nine parts and 24 chapters: Part I is on behavioral economics of risk, uncertainty, and ambiguity. The evidence against expected utility theory is examined, and the behavioral response is outlined; the best empirically supported theory is prospect theory. Part II considers other-regarding preferences. The evidence from experimental games on human sociality is given, followed by models and applications of inequity aversion, intentions based reciprocity, conditional cooperation, human virtues, and social identity. Part III is on time discounting. It considers the evidence against the exponential discounted utility model and describes several behavioral models such as hyperbolic discounting, attribute based models and the reference time theory. Part IV describes the evidence on classical game theory and considers several models of behavioral game theory, including level-k and cognitive hierarchy models, quantal response equilibrium, and psychological game theory. Part V considers behavioral models of learning that include evolutionary game theory, classical models of learning, experience weighted attraction model, learning direction theory, and stochastic social dynamics. Part VI studies the role of emotions; among other topics it considers projection bias, temptation preferences, happiness economics, and interaction between emotions and cognition. Part VII considers bounded rationality. The three main topics considered are judgment heuristics and biases, mental accounting, and behavioral finance. Part VIII considers behavioral welfare economics; the main topics are soft paternalism, and choice-based measures of welfare. Finally, Part IX gives an abbreviated taster course in neuroeconomics.

Taken from the first definitive introduction to behavioral economics, The Foundations of Behavioral Economic Analysis: Other-Regarding Preferences is an authoritative and cutting edge guide to this essential topic for advanced undergraduate and postgraduate students. It considers the evidence from experimental games on human sociality, and gives models and applications of inequity aversion, intention based reciprocity, conditional cooperation, human virtues, and social identity. This updated extract from Dhami's leading textbook allows the reader to pursue subsections of this vast and rapidly growing field and to tailor their reading to their specific interests in behavioural economics.

This sixth volume of The Foundations of Behavioral Economic Analysis covers behavioral models of learning. It is an essential guide for advanced undergraduate and postgraduate students seeking a concise and focused text on this important subject, and examines evolutionary game theory, models of learning, and stochastic social dynamics. This updated extract from Dhami's leading textbook allows the reader to pursue subsections of this vast and rapidly growing field and to tailor their reading to their specific interests in behavioral economics.

'If there is anything that can invariably be experienced in modern economies, then it is their incessant innovative transformation. In this fine volume Buenstorf brings together a selection of cutting edge research papers which jointly give the reader a grasp of how these innovative changes come about. the volume highlights how evolutionary economics keeps track of the transformation processes at various levels. with its well chosen focus on behavioral studies, organizational learning and development, and industrial genealogy the volume covers the currently most dynamic topics in the field.' - Ulrich Witt, Max Planck Institute of Economics, Germany