The Evolution of Behavioral Economics over Half a Century: The Historical Trajectory of Paradigm Shift

The evolution from old behavioral economics to modern behavioral economics is essentially the formation of a new theoretical paradigm. Old behavioral economics attempts to interpret some economic phenomena from a psychological perspective, but lacks a complete and independent theoretical logic system. Modern behavioral economics seems to originate from old behavioral economics, but it is fundamentally different from it. Modern behavioral economics inherits the analysis and related thoughts from the psychological perspective of the old behavioral economics, but does not reject the neoclassical economics at the same time. Instead, on the basis of the theoretical paradigm of neoclassical economics, it introduces human sociality, and constructs a complete theoretical logic system based on the assumption of bounded rationality. Compared with neoclassical economics, this theoretical system has different assumptions of rationality and human nature, which means that there are essential differences in the theoretical core. In this sense, modern behavioral economics has built its own new paradigm, which is also compatible with neoclassical economics. This is also the key reason why modern behavioral economics can bring different degrees of change to the existing branches of economics.