The Beginnings of Behavioral Economics
Katona, Simon, and Leibenstein's X-Efficiency Theory

Explores how empirical expansions of mid-20th century X-Efficiency Theory can help economists understand and predict the firm and labor market

Roger Frantz (Author)

9780128152898, Elsevier Science

Paperback, published 24 September 2019

258 pages
22.9 x 15.1 x 1.7 cm, 0.39 kg

"Explores the history of the field of behavioral economics, focusing on the relationship between the first and subsequent generations of behavioral economists. Explores studies on X-efficiency among financial institutions in the United States and Asia from circa 1990 to 2017." --Journal of Economic Literature

The Beginnings of Behavioral Economics: Katona, Simon, and Leibenstein's X-Efficiency Theory explores the mid-20th century roots of behavioral economics, placing the origin of this now-dominant approach to economic theory many years before the groundbreaking 1979 work on prospect theory by Daniel Kahneman and Amos Tversky. It discusses the work of Harvey Leibenstein, Herbert Simon, George Katona, and Frederick Hayek, reintroducing their contributions as founding pillars of the behavioral approach. It concentrates on the work of Leibenstein, reviewing his nuanced introduction of X-efficiency theory. Building from these foundations, the work explores the body of empirical research on market power and firm behavior – XE relationship.

1. Introduction2. Two beginnings3. The “Big 3.? Simon, Katona, Leibenstein4. It didn’t just happen overnight5. Leibenstein before X-efficiency theory6. X-efficiency. An intervening variable7. Empirical research on XE: c.1967–19908. XE among US financial institutions9. XE among financial firms in Asia10. XE among Asian non-financial institutions11. XE in Europe12. XE in Australia and New Zealand, Latin America, the Middle East, Africa, and the world13. Conclusions

Subject Areas: Microeconomics [KCC]