Title: Psychology and the market
First published: 2003
Description: "Prospect theory, loss aversion, mental accounts, hyperbolic discounting, cues, and the endowment effect can all be seen as examples of situationalism -- the view that people isolate decisions and overweight immediate aspects of the situation relative to longer term concerns.  But outside of the laboratory, emotionally-powerful situational factors -- frames, social influence, mental accounts -- are almost always endogenous and often the result of self-interested entrepreneurs.  As such, laboratory work and, indeed, psychology more generally, gives us little guidance as to market outcomes.  Economics provides a stronger basis for understanding the supply of emotionally-relevant situational variables.  Paradoxically situationalism actually increases the relative importance of economics"--National Bureau of Economic Research web site.
Subjects: Creative thinking, Economics, Investments, Marketing, Psychological aspects, Psychological aspects of Economics, Psychological aspects of Investments, Psychological aspects of Marketing
LC classification: HB1