Cover; Contents; List of Figures; List of Tables; Preface; Acknowledgments; PART I: INTRODUCTION; CHAPTER 1 Nature of Behavioral Economics; 1.1 Behavioral economics and the standard model; 1.2 History and evolution of behavioral economics; 1.3 Relationship with other disciplines; 1.4 Objectives, scope and structure; 1.5 Summary; 1.6 Review questions; 1.7 Applications; Case 1.1 Loss aversion in monkeys; Case 1.2 Money illusion; Case 1.3 Altruism; CHAPTER 2 Methodology; 2.1 Theories; 2.2 Evidence; 2.3 Consilience; 2.4 Summary; 2.5 Review questions; 2.6 Applications.

Case 2.1 Do economists need brains?Case 2.2 Riots in the UK; PART II: FOUNDATIONS; CHAPTER 3 Values, Preferences and Choices; 3.1 The standard model; 3.2 Axioms, assumptions and defi nitions; 3.3 The evolutionary biology of utility; 3.4 Broadening rationality; 3.5 Types of utility; 3.6 The neuroscientific basis of utility; 3.7 Policy implications; 3.8 Summary; 3.9 Review questions; 3.10 Applications; Case 3.1 Drug addiction; Case 3.2 When abstention is better than moderate consumption; Case 3.3 Environmental protection; Case 3.4 The way the brain buys; CHAPTER 4 Beliefs, Heuristics and Biases.

4.1 The standard model4.2 Probability estimation; 4.3 Self-evaluation bias; 4.4 Projection bias; 4.5 Magical beliefs; 4.6 Causes of irrationality; 4.7 Summary; 4.8 Review questions; 4.9 Review problems; 4.10 Applications; Case 4.1 Fakes and honesty; Case 4.2 Trading on testosterone; Case 4.3 Celebrity contagion and imitative magic; CHAPTER 5 Decision-making under Risk and Uncertainty; 5.1 Background; 5.2 Conventional approaches to modifying EUT; 5.3 Prospect theory; 5.4 Reference points; 5.5 Loss- aversion; 5.6 Shape of the utility function; 5.7 Decision- weighting.

5.8 Criticisms of prospect theory5.9 Recent theories and conclusions; 5.10 Summary; 5.11 Review questions; 5.12 Review problems; 5.13 Applications; Case 5.1 The endowment effect; Case 5.2 Insensitivity to bad income news; Case 5.3 Loss-aversion in golf; CHAPTER 6 Mental Accounting; 6.1 Nature and components of mental accounting; 6.2 Framing and editing; 6.3 Budgeting and fungibility; 6.4 Choice bracketing and dynamics; 6.5 Policy implications; 6.6 Summary; 6.7 Review questions; 6.8 Applications; Case 6.1 The equity premium puzzle; Case 6.2 Why you can't find a cab on a rainy day.

Case 6.3 Consumer spending and housing wealthPART III: INTERTEMPORAL CHOICE; CHAPTER 7 The Discounted Utility Model; 7.1 Introduction; 7.2 Origins of the DUM; 7.3 Features of the DUM; 7.4 Methodology; 7.5 Anomalies in the DUM; 7.6 Summary; 7.7 Review questions; 7.8 Applications; Case 7.1 Empirical estimates of discount rates; CHAPTER 8 Alternative Intertemporal Choice Models; 8.1 Time preference; 8.2 Time-inconsistent preferences; 8.3 Hyperbolic discounting; 8.4 Modifying the instantaneous utility function; 8.5 More radical models; 8.6 Empirical evidence; 8.7 Policy implications; 8.8 Summary.