BEHAVIORAL ECONOMICS WITHOUT ANOMALIES

Behavioral economics is often conceived as the study of anomalies superimposed on a rational system. As research has progressed, anomalies have multiplied until little is left of rationality. Another conception of behavioral economics is based on the axiom that value is always maximized. It incorporates so-called anomalies either as conflicts between temporal patterns of behavior and the individual acts comprising those patterns or as outcomes of nonexponential time discounting. This second conception of behavioral economics is both empirically based and internally consistent.