Cognitive Economics is the economics of what is in people’s minds. It is a vibrant area of research (much of it within Behavioral Economics, Labor Economics and the Economics of Education) that brings into play novel types of data—especially novel types of survey data. Such data highlight the importance of heterogeneity across individuals and highlight thorny issues for Welfare Economics. A key theme of Cognitive Economics is finite cognition (often misleadingly called “bounded rationality”), which poses theoretical challenges that call for versatile approaches. Cognitive Economics brings a rich toolbox to the task of understanding a complex world.
Conversations with Robert Willis inspired this paper. I would also like to thank participants at the Japanese Economic Review conference at Keio University. In addition to an honorarium associated with that conference, this work was supported by National Institute on Aging grants P01-AG026571 and R01-AG040787 to the University of Michigan. The views expressed herein are those of the author and do not necessarily reflect the views of the National Bureau of Economic Research.
Miles Kimball, 2015. "Cognitive Economics," The Japanese Economic Review, Japanese Economic Association, vol. 66(2), pages 167-181, 06. citation courtesy of