The proponents of the Austrian school of economics, like economists in general, often take a negative view of incorporating psychological assumptions in the main body of economic theory. Still they regularly make use of such assumptions while applying the theory. The paper argues for a cautious use of the findings of psychology from the very start of economic reasoning. The examples employed to illustrate the argument are from the loan decision process of a banker.
The Review of Austrian Economics – Springer Journals
Published: Oct 27, 2004
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