Exotic Preferences Behavioral Economics and Human Motivation

George Loewenstein is one of the pioneers of the rapidly growing field of behavioral economics. For over twenty years he has been working at the intersection of economics and psychology and is one of the few people of whom it can be said that their work is equally respected and well known within both disciplines. This book brings together a selection of his papers focusing on what he calls "exotic preferences"-- the disparate motives that drive human behavior. In addition to covering the history and methodology of behavioral economics, they also touch on a wide range of fascinating topics such as the motives that drive extreme athletes, our propensity to want to get unpleasant experiences out of the way so we can focus on the more pleasant, and the psychology of curiosity. There are also papers on social preferences, discussing the importance of perceptions of fairness in interpersonal interactions, intertemporal choice-- the tradeoffs between costs and benefits occurring at different points in time-- and the impact of emotion on economic decision making. An original introduction outlines Loewenstein's general approach to research, and there are short introductions to each paper outlining briefly when, how and why they came to be written, providing a fascinating and vivid insight into the process of intellectual creativity.

Introduction. General Perspectives, History, and Methods. 1. Because it is There: The Challenge of Mountaineering...for Utility Theory. 2. The Economics of Meaning. 3. The Fall and Rise of Psychological Explanations in the Economics of Intertemporal Choice. 4. Adam Smith, Behavioral Economist. 5. Experimental Economics from the Vantage-point of Behavioral Economics. 6. The Psychology of Curiosity: A Review and Reinterpretation. Social Preferences. 7. Social Utility and Decision Making in Interpersonal Contexts. 8. Explaining the Bargaining Impasse: The Role of Self-Serving Biases. Basic Research on Preferences. 9. Preference Reversals Between Joint and Seperate Evaluations of Options: A Review and Theoretical Analysis. 10. "Coherent Arbitrariness": Stable Demand Curves Without Staple Preferences. Predicting Tastes and Feelings. 11. A Bias in the Prediction of Tastes. 12. Mispredicting the Endowment Effect: Understimation of owners' selling prices by buyer's agents. 13. Projection Bias in Predicting Future Utility. Intertemporal Choice. 14. Anticipation and the Valuation of Delayed Consumption. 15. Anomalies in Intertemporal Choice: Evidence and an Interpretation. 16. Preferences for Sequences of Outcomes. 17. The Red and the Black: Mental Accounting of Savings and Debt. Emotions. 18. Out of Control: Visceral Influences on Behavior. 19. Risk as Feelings. 20. Investment Behavior and the Dark Side of Emotion. 21. Heart Strings and Purse Strings: Carryover Effects of Emotions on Economic Decisions. 22. Separate Neural Systems Value Immediate and Delayed Monetary Rewards.

George Loewenstein, one of the founders of the field of behavioral economics and of the new field of neuroeconomics, is the Herbert A. Simon Professor of Economics and Psychology at Carnegie Mellon University. He received his PhD in economics from Yale University in 1985 and since then has held academic positions at the University of Chicago and Carnegie Mellon University, and fellowships at Center for Advanced Study in the Behavioral Sciences, The Institute for Advanced Study in Princeton, The Russell Sage Foundation and The Institute for Advanced Study in Berlin. His research focuses on applications of psychology to economics. Loewenstein has published more than 100 journal articles in economics, psychology, law, business and medicine as well as numerous books and book chapters. He is the former president of the Society for Judgment and Decision Making.