Professor John Hall
Journal of Economic Literature Classification Codes
B1, B41, D9
Behavioral Economics, Carl Menger, Consumer Theory, Microeconomics, W. Stanley Jevons
In their key works, W. Stanley Jevons (1835-1882) and Carl Menger (1840-1921) introduce crucial behavioral assumptions as these relate to individual and aggregate economic activity. The assumptions found in Jevons’ work primarily focus on the ‘Pain and Pleasure Principle’, originally established by Jeremy Bentham, and how the human characteristic of inevitable variability interacts with basic needs. Subsequently, Menger’s contribution is centered on the idea that the value of a good is inherently subjective and also dependent upon human variability. This inquiry, therefore, seeks to establish that Jevons’ and Menger’s behavioral assumptions led to their being classified as early ‘behavioral’ economists. Expanding outwards, the field of ‘Behavioral Economics’ can be described through the use of a commonly assigned utility function that is familiar in the standard economic analysis of a rational individual – while correcting for inevitable variations in human behavior. Upon careful consideration, it can be determined that Jevons and Menger share many similar ideas and approaches with modern behavioral economists.
Saastamoinen, Yvan. "Behavioral Assumptions in Jevons and Menger, Working Paper No. 33", Portland State University Economics Working Papers. 33. (15 June 2019) i + 15 pages.