Twenty-five years of the Journal of Economic Psychology (1981–2005): A report on the development of an interdisciplinary field of research

Economic Psychology has gained considerable momentum through the introduction of the Journal of Economic Psychology (JoEP) in 1981. Twenty-five years later, economic psychology has a clear profile as an interdisciplinary field of research. A content analysis of articles published in the JoEP together with a bibliometric analysis of references and citing journals identified the topics, the sources and the impact of JoEP. Results indicate the high degree of interdisciplinarity reached in the field, taking its ideas from social psychology, economics and consumer research, and its recognition in business and psychology. Implications for journal policy are discussed.     

Unemployment and economic psychology: An introduction

Starting from literature a short sequential scheme is being presented, including contextual and causal factors of employment, phenomenal aspects of unemployment, moderator variables, effects and lastly interventions and solutions.General aspects as well as more restricted aspects of unemployment as an area of research within economic psychology are mentioned. The contributions within this issue are discussed in connection with the scheme and the different aspects that were distinguished.     

Economic and Psychological Models of Job Search Behavior of the Unemployed

Economic and psychological theories relating tojob search behavior by the unemployed are considered.There exists a noticeable contrast between the economicapproach which is almost exclusively based on a single model of the rational job seeker, andthe diverse approaches adopted by psychologists.Accordingly, the paper concentrates on areas of researchby psychologists which are relevant to the economic model. The paper starts with an overview of theresearch program in economics. Next, the psychologicalliterature on the general well-being of the unemployedis briefly surveyed; this research might be useful in informing economic studies of theeffects of the duration of unemployment on an individuals search behavior. Two psychological approaches to jobsearch behavior are then discussed, namelyexpectancy-value theory and prospect theory. Findings using theexpectancy-value approach suggest that certainpsychological variables, including normative pressures,might play an important role in job search. In addition, these findings highlight the complexrelationship between job expectations and searchintensity. Finally, it is suggested that the role andimportance of certain psychological variables such asstatus might be expected to vary over the course ofunemployment.     

Fertility, labor force participation, and tastes: An economic psychology perspective

Economic and economic psychology models of wife's labor force participation and family size decisions are examined within the context of a marriage cohort. Among other results, it was found that tastes influence the demand for work and number of children, along with traditional economic determinants such as opportunity costs and income. Tastes have an especially strong impact when modeled as unobservables, in order to correct for measurement error. Further, the often observed empirical association between labor force participation and fertility is found to be spurious and not necessarily causal in nature. That is, labor force participation and fertility negatively covary largely as a consequence of common economic and taste antecedents and not due to reciprocal interactions. Hypotheses were tested using a new structural equation methodology.     

From dual processes to multiple selves: Implications for economic behavior

This article presents a short review of dual-process and dual-system theories from social and cognitive psychology and comments on their relevance for research on economic behavior. We view dual-process theories as a theoretical scaffolding which helps structure and interpret experimental results and can deliver important insights on human behavior in economic contexts. Dual-process ideas and concepts have already started to percolate into economics, contributing to the behavioral turn and the incorporation of bounded rationality into economic theory. The most recent development in this direction is represented by multiple selves models, which we view as a promising first step. We conclude the article with a brief discussion of the remaining articles in the special issue.     

Learning in economic theory: a taxonomy with an application to expectations formation

A crucial aspect of the psychology of economic agents is learning. In economic theory learning behavior of human beings occurs, in general, in a rather primitive fashion. Insofar as agents' learning behavior is introduced in formal economic models, it shows up in the form of the adaptation of the values of parameters or variables. The structure of the model employed is considered to be given. In this article a taxonomy of learning is presented, in which the adaptation of parameter and variable values is just one of the manifestations of actual learning behavior of human beings in an economic world. The argument is illustrated with the help of economic theories of expectations formation.     

Toward an integration of ecological psychology and industrial psychology: Undermanning theory,organization size,and job enrichment

The research on the effects of organization size and subunit size on participants' attitudes and behavior is reviewed from industrial psychology and ecological psychology perspectives. It is suggested that conceptualizing organization or subunit size in terms of Barker's undermanning theory is a more heuristic approach than traditional methods employed by industrial researchers. Moreover, undermanning theory is shown to possess similar assumptions as job enrichment strategies in terms of its effects on organizational behavior. A theoretical model integrating these two theories is presented and discussed.     

Niveau de comportement et prise de conscience en psychologie economique

Mental level and grasp of consciousness in economic behaviour. In economic psychology mental level is one of the most useful parameters. This notion provides a solution for the construction of a general model, and can also be applied to several specific questions. The idea of grasp of consciousness is the “internal” or ‘subjective” aspect of these studies relating to economic efficiency. But, in this context, interdisciplinary research is necessary and this has been made possible by the many surveys carried out, among others, by the Laboratory of Economic Psychology of the University of Strasbourg during the last twenty-seven years, in different countries of Europe, Africa and Asia.The concept of mental level allows utilisation of models: simplication, synthesis of quantitative and qualitative factors, and the careful selection of statistical and psychological data are necessary for a positive work. In each country we consider the situation of groups, such as provinces, corporations, enterprises and families, and the notation of mental level explains the principles of behaviour. We observe important thresholds of dynamism between these groups.Grasp of consciousness is a notion that enables further explanation: here, studies and observations are related with the mechanism of degrees of rationality. If the level of consciouness is low, the judgement includes little information, the choices and the forecase do not take into account all the factors. Economic growth and equilibrium are not satisfactory. It is possible to give many examples of this situation. Surveys in Greece and Portugal show the importance of the crossin of thresholds. “Economic horizon” is larger and information better after the period of transition.A second point concerns relative dépendance of this parameter upon external factors (stimuli). When the level of consciousness is not sufficient and rationality weak, influence of stimuli is strong. On the contrary, with high levels, considerations of personal interest are more powerful. Economic Psychology defines schemes of behaviour in the different situations. Surveys of Economic Psychology make use of methods adapted to qualitative investigations. These methods bring together measures for certain factors and notations for others. With questions on the past, present and future foreseeable life of the firm, it is possible, through good research, to determine the main features concerning an enterprise. For larger groups and for countries, the methods are parallel. Forecasting and better diagnosis are possible and qualitative surveys are good technique for improvement of applied economy.     

Introduction The psychology of inflation

The introduction to the special issue on the psychology and economics of inflation deals with some of the questions that typically arise when the topic is psychology and economic behavior. An essential question is how dependable and stable over time psychological findings and methods are. The preliminary answer suggested is that there are psychological theories that have survived the test of time and which could then qualify for possible consideration when economic behavior is the concern. The contributions to the special issue are briefly commented on against this background.     

Do developing economies require creative industries? Some old theory about new China

This paper argues that media and communications theory, as with cultural and creative industries analysis, can benefit from a deeper understanding of economic growth theory. Economic growth theory is elucidated in the context of both cultural and media studies and with respect to modern Chinese economic development. Economic growth is a complex evolutionary process that is tightly integrated with socio‐cultural and political processes. This paper seeks to explore this mechanism and to advance cultural theory from an erstwhile political‐economy perspective to one centred about the co‐evolutionary dynamics of economic and socio‐political systems. A generic model is presented in which economic and social systems co‐evolve through the origination, adoption and retention of new ideas, and in which the creative industries are a key part of this process. The paper concludes that digital media capabilities are a primary source of economic development.     

青少年消费特征及趋势探析

1992年以来,在我国经济快速发展,消费主义思潮引导及大众传媒示范等的综合效应之下,青少年消费心理和消费行为出现新的特征和趋势:消费结构从生存型走向发展型和享受型,消费心理从使用价值走向符号价值,网络消费成为消费的重要方式,不同群体青少年的消费观趋同。为了引导青少年的理性消费行为和习惯,需要在家庭、学校和社会中提升消费教育意识,创新消费教育形式,促进消费教育系统化、规范化和常态化。     

Retail entrepreneurial values in a bicultural community: Cultural and economic contentions and negotiation

Economic activity is universal yet the objectives of entrepreneurship are culture-specific in that the entrepreneur cannot be separated from the cultural context. The purpose of this research was to understand the structural differences between the Old Order Amish and their non-Amish counterpart as they conduct entrepreneurial activity in a bi-cultural rural setting. Eleven months of field research uncovered distinct differences between the two groups with regard to three conceptual themes: responsibility, cooperation and competition, and success. Amish entrepreneurs often find themselves in a state of negotiation between contradictory values of their own cultural system and those of the dominant world. The economic behavior of non-Amish entrepreneurs, on the other hand, is steeped in notions of individual gain found in the free market system. In an increasingly multicultural world, understanding the role of culture in economic life becomes critical if cultural groups are to conduct business in the same marketplace.     

George Katona: A founding father of old behavioral economics

Assuming the division of behavioral economics into old and new, the paper begins to argue that old behavioral economics began with the works of two giants – George Katuna and Herbert Simon during the 1950s and early 1960s. The contributors of Herbert Simon are well established, thanks to the popularity of bounded rationality and satisficing, and his being award Noble Prize in economics. However, economists are much less familiar with the contributions of George Katona that can be viewed as the father of behavioral economics. Furthermore, the author argues that Katona was also misunderstood by various economists when he was attempting to create a psychologically based economics that rejected the mechanistic psychology of neoclassical economics and introducing the survey method to economic research that he had been using in his experimental psychology research previously. He also had influenced various economists during their debates in the 1950s without given the credit for. Many historians of behavioral economics limit Katona's contributions to the start of behavioral economics only to his contributions to macroeconomics. However, the paper demonstrates that Katona's behavioral economics included his contributions to macroeconomics (bringing realism to Keynesian consumption function and consumption behavior), micro-economics (business behavior, the rationality assumption, etc.), public finance and economic policy, and his introduction of the survey method. To demonstrate these contributions, the author argues that Katona attempted to bring realism to economic analysis – through psychological concepts – beginning with his early days of research in Germany which coincided with German hyper inflation- and continued whether working at New school for Social Research, Chicago University's Cowles Commission, the U.S. Department of Agriculture, or the University of Michigan's Survey Research Center. The author also argues that Katona's contributions went through stages, depending upon what economic problem persisted at the time, what advertises he was facing, and what institution/organization he was associated with.     

A behavioral model of the demand for consumer durables

It is argued that models of the demand for consumer durables would be strengthened by the introduction of a behavioral element reflecting the nature of the decision making process within the individual household. A possible behavioural model is described. It is suggested that this would consist of the following elements: general economic confidence of the consumer (derived from personal expectations and attitudes to the general economic situation): general durable purchasing orientation (including willingness to devote resources to durable purchasesand house moving expectations); specific product choice considerations (including orders of acquisition of new durables: the implicit depreciation of existing equipment; perceptions of the characteristics of new products; purchase expectations). Such a model is more extensive than that normally described by others working in this field. The interaction between the different variables is discussed. It is shown that all these elements can be estimated through regular surveys and so the model can be made operational for forecasting purposes. However, it needs to be recognised that there are also unexpected even as which will affect the outcome in individual circumstances and the nature of these is also considered.     

Uncertainty and the Rise of the Work‐Family Dilemma

Existing research argues that women's wages, consumerism, and changing attitudes dismantled the male bread‐winner system. Families' economic need is dismissed with the suggestion that mothers' rhetoric of “need” was a smoke screen to defend against social stigma for working mothers. Drawing on biennial data from 1965 to 1987, I suggest that consumptive certainty of the 1950s and 1960s gave way to economic uncertainty in the 1970s and beyond. Economic uncertainty provided impetus, legitimacy, and justification for young families to adopt new work‐family arrangements. Hence, economic uncertainty is conceptualized as a real circumstance that substantiates families' reasonable perceptions of need.     

Income tax evasion dynamics: Evidence from an agent-based econophysics model

We analyze income tax evasion dynamics in a standard model of statistical mechanics, the Ising model of ferromagnetism. However, in contrast to previous research, we use an inhomogeneous multi-dimensional Ising model where the local degrees of freedom (agents) are subject to a specific social temperature and coupled to external fields which govern their social behavior. This new modeling frame allows for analyzing large societies of four different and interacting agent types. As a second novelty, our model may reproduce results from agent-based models that incorporate standard Allingham and Sandmo tax evasion features as well as results from existing two-dimensional Ising based tax evasion models. In this way, such kind of models may become more relevant and useful in economics as well as social psychology. We finally use our model for analyzing income tax evasion dynamics under different enforcement scenarios and point to some policy implications that may also be of interest for psychological research on tax compliance.     

ASSETS, SAVINGS AND LABOR SUPPLY

This paper examines the role of assets in labor supply functions. Although assets have frequently been used to measure the response of hours worked to non wage-related income, it is generally incorrect to include them in a labor supply equation. Using a simple life cycle model, working hours and assets are shown to be simultaneously determined by similar economic forces. Therefore, the correlation between them should not be accepted as evidence of a causal sequence from assets to market work. An empirical test of the life cycle implications for savings behavior is performed using data from the Survey of Economic Opportunity.     

Fairness and self-interest: An assessment

This paper provides an assessment of some fairness notions that are particularly relevant to economics of the marketplace. Motivations of fairness are also discussed. In this vein, three sources of fairness are outlined: moral precepts, stable convention, and reciprocity. Some suitable theoretical and empirical evidence are presented in support of these views. Economic models based on the view that man is purely selfish have performed poorly in some areas, particularly game theory and voluntary contributions to public goods. In other social sciences, notably in psychology, political science, and sociobiology researchers have also encountered systematic deviations from purely selfish behavior. There is ample evidence that both fairness and self-interest matter. It is hoped that this paper will provide a better comprehension of the tensions and complementarities between fairness and self-interest and improve our understanding of human behavior.     

Economic distress and mental health: The role of family coping resources and behaviors

Relationships among economic distress, family coping resources and behaviors, and mental health are examined among a sample of 203 married men and 207 married women. Economic distress is negatively associated with mental health. Although family coping resources are lower among those experiencing economic distress and are generally positively related to mental health, their role as mediators of relationships between economic distress and mental health is limited. Economic distress is positively related to family coping behaviors. However, these behaviors do not have positive relationships with mental health and do not counteract the effects of economic distress on mental health. Some coping resources and behaviors have buffering effects on relationships between economic distress and mental health while others have exacerbating effects.This article is a revision of a paper presented at the annual meeting of the American Sociological Association, August, 1986. The research was supported by grant 84–164 from the Office of Program Evaluation and Research, Ohio Department of Mental Health. Additional support was provided by the Office of Computing Activities, University of Dayton.Patricia Voydanoff is Director of the Center for the Study of Family Development, University of Dayton. Dr. Voydanoff holds a Ph.D. in Sociology from Wayne State University. Her research interests include work and family life and coping with economic distress.Brenda W. Donnelly is a Research Associate at the Center for the Study of Family Development, University of Dayton. Dr. Donnelly received her Ph.D. from the University of Delaware. She is currently conducting research on adolescent childbearing and religion and family life.     

Strategies in dynamic decision making - An experimental investigation of the rationality of decision behaviour

This paper is concerned with the question of how people tackle dynamic decision problems. It is on the interface between economics and psychology. Economic theory has a well-defined theory of how people should tackle such problems, but experimental evidence suggests that these are not empirically valid, and particularly that people find dynamic decision problems complex and cognitively demanding. Psychologists have long been aware of such issues and have developed a suite of theories to explain behaviour in such contexts, but these have been largely developed in a static context. This paper attempts to build a bridge between the two disciplines by exploring decision processes in a dynamic problem for which economic theory provides clear predictions. To aid us in this quest we use an experimental design which enables us to infer the decision rules that people are using. We identify a number of distinct decision heuristics, which could usefully be embodied into economic models of dynamic decision making.