Excerpt

Behavioral Economics and Public Policy: A Pragmatic Perspective. Raj Chetty, May 2015, Paper. "The debate about behavioral economics--the incorporation of insights from psychology into economics--is often framed as a question about the foundational assumptions of economic models. This paper presents a more pragmatic perspective on behavioral economics that focuses on its value for improving empirical predictions and policy decisions. I discuss three ways in which behavioral economics can contribute to public policy: by offering new policy tools, improving predictions about the effects of existing policies, and generating new welfare implications." Link