BE and EE: Cousins but not twins

Abstract

While behavioral economics and experimental economics are largely aligned and share many similarities, they also share differences. Behavioral economics is a collection of theories and models while experimental economics is a tool. The clear union of behavioral and experimental economics allows for a continual growth of knowledge. Behavioral models are refined through observed behavior in the laboratory and observed laboratory behavior yields new behavioral models. Behavioral and experimental economics can very much follow a cycle. Both have become valuable tools to policy makers around the world.