Psychology and Economics

Behavioural economics is an exciting and expanding area of study in which principles and theories from psychology are used to explain activities related to financial and resource management. Philosophers such as Adam Smith and Jeremy Bentham were interested in how psychological principles underpin economic outcomes. Economics has been influenced by cognitive and social psychology and the ways in which individuals make decisions, assess risk and rationalise their decision making. An outstanding example of the role of psychology in economics was the awarding of a Nobel Prize to Daniel Kahneman in 2002 for his work on psychology and economics.The recent world-wide financial problems have provided and will continue to provide stimulus for research into how we make economic decisions and deal with the consequences. Students who study for a joint honours scheme in psychology and economics will be working at the cutting edge of psychology research considering the impact that psychology has in understanding how human beings operate financially in the global marketplace.