1. The Agenda of BE  Good theories – abstractions; 4 criteria  Behavioral revisions – game theory, loss-aversion, time- inconsistent preferences, inequality-aversion, reciprocity, endowment effects, framing effects, anchoring effects, lack of fungibility, choice bracketing

2. Criticisms of BE  Profusion of models 1. Situation-specific models 2. Heterogeneous Populations 3. Conflicting theories feature of science 4. Relatively new area  Lack of normative status  Complicates policy implications

3. Are We Really Irrational?  Trivializations Even highly motivated experts biased.  Misinterpretations e.g. conjunction error, representativeness heuristic, framing.  Inappropriate tests Computational limitations, inappropriate problem formats, norms.  Rational rationality

4. Policy Implications  Individuals 1) Emotions and memory – durability bias, forgetfulness 2) Inter-temporal conflicts in decision-making – time-inconsistency 3) Game theory – repeated interactions  Firms 1) Inter-temporal conflicts – charging for investment and leisure goods 2) Loss-aversion – reference prices, reducing Q instead of increasing P 3) Game theory – signalling to competitors, labour contracts and fairness  Governments 1) Loss-aversion – policies in recession, trade-offs 2) Inter-temporal conflicts – policy trade-offs, pensions, health issues 3) Game theory – auctions, trade policy, environmental policy, mediation