Behavioral Public Economics shows how standard public economics can be improved using insights from behavioral economics. Public economics typically lists four market failures that may justify government intervention in markets―imperfect competition (or natural monopoly), externalities, public goods, and asymmetric information. Under the rational choice paradigm (‘agents choose what is best for them’), public economics has examined the welfare effects of policy. Recent research in behavioral economics highlights a fifth market failure―individuals may make mistakes in pursuing their own well-being. This book calls for a rethinking of assumptions of individual behavior and provides a good foundation for public economic theory.
Key features:
- Introduces behavioral perspectives into public economics.
- Explains why economic incentives often undermine social preferences.
- Reveals that social incentives matter for public policy.
This book will be an invaluable resource for researchers and postgraduate students in public economics, behavioral economics, and public policy.
Author(s): Shinji Teraji
Publisher: Routledge
Year: 2021
Language: English
Pages: 218
City: London
Cover
Half Title
Title Page
Copyright Page
Table of Contents
List of Figures
Preface
1 Introduction: Why ‘Behavioral’ Public Economics?
1.1 Public Economics and Policy
1.2 Behavioral Economics and Policy
1.3 Why Social Preferences Matter?
1.4 From Economic Incentives to Social Incentives
Notes
2 Preferences, Utility, and Welfare
2.1 Preferences and Choices
2.1.1 Revealed Preference Theory
2.1.2 Critique of Revealed Preference Theory
2.1.3 Behavioral Economics and Revealed Preference Theory
2.2 Utility
2.2.1 What Is Utility?
2.2.2 Expected Utility Theory
2.3 Welfare: Personal and Social
2.4 Well-Being and Happiness
Notes
3 Economic Incentives in Public Economics
3.1 Taxation
3.2 Sin Taxes
3.3 Imperfect Information and Contracts
3.4 Tax Compliance
3.5 The Environment
Notes
4 Behavioral Economics and Public Policy
4.1 Bounded Rationality
4.1.1 Herbert Simon and Bounded Rationality
4.1.2 Routine
4.1.3 Selective Rationality and X-Efficiency
4.1.4 Ecological Rationality
4.2 Perception and Entrepreneurship
4.2.1 Uncertainty
4.2.2 Schumpeterian Entrepreneurship
4.2.3 Kirznerian Entrepreneurship
4.3 Errors and Biases
4.4 Gains and Losses
4.5 Nudges
4.6 Addiction and Self-Control
Notes
5 Social Preferences and Moral Economy
5.1 Social Incentives and Social Preferences
5.2 Social Preferences and Fairness
5.3 Altruism and Envy
5.4 Public Goods and Charitable Giving
5.5 Philanthropy and Corporate Social Responsibility
Notes
6 Social Incentives and Interaction
6.1 Society and Coordination Problems
6.2 Social Norms
6.3 Norm Compliance
6.4 Identity and Culture
6.5 Social Preferences and Internal Moral Constraints
Notes
7 Governing the Commons With Social Incentives
7.1 The Tragedy of the Commons
7.2 Social Preferences and Environmental Sustainability
7.3 Internal Moral Constraints and Environmental Sustainability
7.4 From Homo Economicus to Homo Moralis
Notes
Bibliography
Index
