This semester, Jeremiah L. Lowin ’07 found his plans for a joint concentration frustrated when he was unable to enroll in Economics 1030, “Psychology and Economics,” a foundational course for study in an emerging field that has attracted the attention of students and top professors across the nation.
As Lowin vied with over 150 other students for a spot in the 90-person class, Harvard, too, aims to secure a spot at the forefront of research that combines economics and psychology, also known as “behavioral economics.”
This year, the economics department is moving to expand its faculty in this field, luring Professor of Economics Sendhil Mullainathan from MIT to Harvard, and extending a tenure offer to Matthew Rabin of the University of California at Berkeley, both of whom are doing extensive work in behavioral economics.
“Our department probably makes an average of one or two tenure offers a year...so to make two offers to Professor Mullainathan and Matthew Rabin is certainly a strong signal that our department is certainly very interested in this field,” says Chair of the Economics Department Alberto Alesina, who says psychology and economics has emerged as a “booming field” in the last five or six years.
Behavioral economics seeks to explore the psychological factors, other than the traditional model of rational self-interest, that influence economic behavior.
Undergraduates, too, are eager to tap into the new field, despite the difficulties involved in pursuing joint degrees.
“Economics is basically the study of rational decision-making, but I definitely don’t think people are like machines and operate rationally,” Lowin says. “There’s more to it than graphs and diagrams and I want to study why people value the things they do and make the choices they do.”
The field of psychology and economics “allows people to make mistakes and be irrational, and basically allows people to be people,” he says.
“It certainly seems to me there’s greater interest,” says Robert H. Neugeboren, an Assistant Director of Undergraduate Studies in Economics.
With more professors in the field, “undergrads will have more opportunities to do more coursework and research,” Neugeboren adds.
“The professors who I would consider in this field of behavioral economics are so decentralized. There are classes I would take at the Medical School that are relevant to my field,” says Lisa Xu ’06, a joint concentrator in Psychology and Economics.
Joint concentrators in Psychology and Economics tend to take the foundational courses in both departments, as well as those offered by Harvard’s other schools.
“The way the departments are structured now, it kind of forces you to go to different departments. You have to do a lot more research, to try to pull those resources together at the University,” says Xu.
To develop and centralize its resources in the field of behavioral economics, the Economics Department, largely considered to be one of the best faculties in the country, is expanding its faculty in this field as its first step.