+1 862 207 3288 Behavioral economics is criticized on following grounds:
The main criticism is made that individuals are rational agents. According to them, competitions as well as learning opportunities make sure that the decisions are rational.
Traditional economists are of the view that decisions are made through revealed preferences and not on the basis of survey and experimental based approach which behavioral economics uses.
One other criticism of behavioral economics is that it may work for an individual but not as a group. It studies certain individual working in a certain way but do not study economic behavior as a whole.
Behavioral economists are confusing psychology with economics. They are taking the principles of psychology and mixing it with economics.
According to the critiques, theories such as prospect theories are only models of decision making and can never be generalized.
It is not the case that behavioral economics is disregarded totally but it would be too early to say that it is ready to overthrow the orthodox economics. Right now it is just equivalent to few models based on certain individuals which is nowhere near explaining the complex system that an economy is.
There is a need of a balance between rational human behavior psychological human behavior so as to bring out a balance between orthodox and behavioral economics.
