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After a long hiatus, psychology and economics today are back in conversation with each other: active research programs in behavioral economics, neuro-economics, and the economics of happiness bespeak a thriving cross-disciplinary discussion. Yet for most of the twentieth century, economists distanced themselves from psychology; when they spoke of science, they referred, in the first instance, to the physical sciences, then perhaps to the biological sciences. A hundred years ago, however, American intellectuals viewed psychology as a progressive science and economics as traditionalist – mired in the antiquated notions of laissez-faire and individualism. A social science that assumed individuals knew their preferences, directed their actions toward fulfilling them in a rational manner, and in the process engaged others in dispassionate exchange, was clearly not speaking to the issues of the modern world. The death of progressivism in the wake of WW I only reinforced the rise of psychology: good intentions weren’t enough, motives were suspect, rational individuals went mad in the midst of conflict and turmoil, complex emotions ruled. Careful psychological analysis could, however, enable society to gain some degree of control over the fundamental irrationality of human action.

The purpose of this paper is to discuss implications of the global crisis for economic and financial research and policy.

The paper reviews many recent studies on the crisis and offers the author's views on some of the most important lessons to be drawn from the crisis

The review counters views that the crisis reflected a basic failure of economics, but agrees that it undercuts some particular theories and approaches to economics. More attention needs to be given to imperfections in the operation of both markets and governments, drawing on insights from behavioral and neuro economics and finance and political economy analysis and recognizing the importance of limited information and uncertainty about correct models. The creation of perverse incentive structures explain a large part of the financial excesses that led to the crisis. Financial considerations need to be integrated much more closely with macroeconomic analysis and financial risk analysis needs to pay more attention to economic considerations. Useful insights can be drawn from many different theories and approaches and we should not expect any one theory to have all the answers. The excesses observed in the advanced economies do not imply that there are not enormous benefits to be gained from further financial liberalization in emerging market economies, but they do show that great care must be taken in establishing strong supervision of such liberalizations and highlight many of the dangers to look out for.

The paper offers a guide to the literature for those interested in learning more about the causes and effects of the crisis and policy responses and offers a number of suggestions for fruitful research topics and policy strategies.

The kinds of decisions people make or how they react to certain situations could differ according to the society, atmosphere or environment those people come from. Studies about the influence of human behaviors on economics, business and actions were initiated by analyzing human behaviors and those studies carry on into behavioral finance and behavioral accounting.

In previous years, the models used were based on the assumption that people behave rationally while making decisions. These models lost validity recently and behavioral accounting started to search for the influences affecting human behaviors. They started considering not only the people who prepare accounting data but also the people who take advantage of this data. People’s environment, cultural differences, psychological and sociological factors have entered into the accounting’s field of interest as factors that have an influence on behavior.

The aim of this study is to try to analyze the theoretical bases and extent of behavioral accounting, which focuses on the human behavior factors being observed while creating or using financial reports. The authors also aim to contribute to the literature by including the neuroaccounting dimension into the analysis.

This study aims to argue that in the case of quantitative security risk assessment, individuals do not estimate probabilities as a likelihood measure of event occurrence.

The study uses the most commonly used quantitative assessment approach, the annualized loss expectancy (ALE), to support the three research hypotheses.

The estimated probabilities used in quantitative models are subjective.

The ALE model used in security risk assessment, although it is presented in the literature as quantitative, is, in fact, qualitative being influenced by bias.

The study provides a factual basis showing that quantitative assessment is neither realistic nor practical to the real world.

A model that cannot be tested experimentally is not a scientific model. In fact, the probability used in ISRM is an empirical probability or estimator of a probability because it estimates probabilities from experience and observation.

The purpose of this paper is to look behind the veil of the concept of Gross National Happiness (GNH), which has been initiated by the fourth King of Bhutan as an alternative to the traditional development concept of gross national product, by analyzing it as an expression of a particular view of leadership originated in the philosophical tradition of Mahayana Buddhism and exploring its relevance for leadership of sustainable development and sustainable (business) organizations.

Review of literature on GNH in a historical and current context, linking it to trends and concepts in sustainability and leadership. Complemented by author’s observations on regular visits to Bhutan since 2003.

The GNH leadership view consists of a set of principles: first, interrelatedness of economy, society and eco-systems; second, the economy, society and eco-systems can flourish if their needs are served; third, governance is the agent for serving these needs by the creation of societal happiness; and fourth, societal happiness should include the enhancement of subjective happiness and well-being of people. By tracing these principles to the philosophy of Mahayana Buddhism, especially the Bodhisattva ideal, and comparing them to the principles driving sustainability, the paper argues that GNH leadership signifies an innovation in leadership for sustainability.

This paper examines how GNH leadership can be applied to organizational and business sustainability, and how it contributes to the emerging theory and practice of sustainability leadership.

The social relevance of the paper lies in the examination of how GNH leadership can be applied to organizational and business sustainability, and how it contributes to the emerging theory and practice of sustainability leadership.

The paper concludes that GNH leadership – as it corresponds to the principles driving sustainability – represents a new model for sustainability leadership.

Purpose – To respond to a paper by D'Amico and Boettke arguing that certain scholars, including myself, whom they label “Neuro-Hayekians” have both oversold the importance of Hayek's The Sensory Order for understanding his economics and misunderstood the importance of institutions as opposed to brains/minds in generating social order.

Methodology/approach – I offer a different interpretation of my own work, particularly my use of the word “foundational” to describe the role of The Sensory Order in Hayek's system as well as a criticism of D'Amico and Boettke's apparent dualism.

Finding – On a more careful reading of my own work, as well as that of Hayek himself, I argue that I am not guilty of holding the view that D'Amico and Boettke attribute to me.

Research limitations/implications – The major implication of this exchange is that there is much more agreement than D'Amico and Boettke seem to think.

Originality/value of paper – The value of this paper is found in its attempt to make clear that those scholars arguing for the importance of Hayek's cognitive theory in understanding his work are not arguing that it is a necessary or sufficient condition for understanding his system. Rather, it is valuable for grasping the interconnectedness of his theories of the mind and the market and the relationship between them.

This study aims to critically review recent contributions to the methodology of financial economics and discuss how they relate to one another and directions for further research.

A critical review of recent literature on new methodologies for financial economics.

Recent books have made important contributions to the study of financial economics. They suggest new approaches that include an emphasis on radical uncertainty, adaptive markets, agent-based modeling and narrative economics, as well as extensions of behavioral finance to include concepts such as diagnostic expectations. Many of these contributions can be seen more as complements than substitutes and provide fruitful directions for further research. Efficient markets can be seen as holding under particular circumstances. A major them of most of these contributions is that the study of financial crises and other aspects of financial economics requires the use of multiple theories and approaches. No one approach will be sufficient.

There are great opportunities for further research in financial economics making use of these new approaches.

These recent contributions can be quite useful for improved analysis by researchers, private participants in the financial sector and macroeconomic and regulatory officials.

Provides an introduction to these new approaches and highlights fruitful areas for their extensions and applications.

As the developing nations grow and experience rapid institutional transformation, research has begun to investigate the roles of culture, cognition and institutional context on entrepreneurship and innovation. This chapter aims to advance the entrepreneurial cognition literature by juxtaposing entrepreneurial effectuation, domain-specific expertise and ambiguity. By conducting a qualitative study of Chinese high-tech domestic and returnee entrepreneurs, the authors propose a spectrum between causation and effectuation and argue that the entrepreneur’s perceived level of ambiguity may better explain differing logic orientations among entrepreneurs, contributing to our understanding of entrepreneurial cognition. The authors theorize that (1) individual actors and the level of institutional development jointly comprise the entrepreneur’s logic orientation; (2) the level of perceived ambiguity mediates the strategy adopted by high-tech entrepreneurs; (3) the entrepreneur’s logic orientation can be regarded as a continual spectrum from effectuation to causation. Finally, the logic orientation concept is applied to the context of cross-border mergers and acquisitions (M&A) from a process perspective and the implications and fit of logic orientation with the stages of cross-border M&A are discussed.