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Dear Members of the IAAP Division 9,

Here are some important news concerning our Division.

1) The next annual conference of the International Association for Research in Economic Psychology is going to be organized in Exeter in July 2011.
Information concernig this conference can be found on the web page: http://2011.iarep.org/

2) We received the following announcement about the doctoral program from Prof. Michael Lang:

We are extremely happy to announce that WU has established a “Doctoral Program in International Business Taxation” (DIBT). This PhD program is a 3-year program, offered inEnglish only, and it is open to outstanding students from all over the world who are interested in an excellent doctoral education preparing them for doing research in international business taxation. The Doctoral Program provides high-quality interdisciplinary training for graduates in the field of international taxation including and combining the disciplines of public finance, international tax law and cross-border tax management. Although students will write their doctoral thesis in their own discipline (law, business, public finance, economic psychology, …) they will be exposed to intensive interdisciplinary discussions during their stay in Vienna. By opening traditional tax training to other disciplines like economic psychology, history, political science, ethics, legal philosophy as well as organizational behavior and decision making (always in the context of taxation), a broadening of horizons and a more comprehensive approach to research questions is expected. The best possible standards in both research and teaching are guaranteed by a faculty of renowned scholars, who have published in the most prominent journals of their respective research fields and have proven a willingness and ability to do interdisciplinary research. The most distinguished professors in tax law, business administration, and public finance are either on the faculty of this program or have agreed to teach courses, give workshops, or to discuss research ideas and preliminary research results with the PhD students in Vienna. Students will be integrated in the research activities of the WU institutes dealing with taxation issues.
During the first year, students will be required to attend comprehensive courses to get the basic knowledge necessary for interdisciplinary work. The second and the third year will be dedicated to seminars in related fields, a research stay abroad, additional optional workshops, and especially to research on a thesis. Throughout the three years, research seminars will help guide the students.
We will admit a very limited number of students each year. Tuition will be completely waived for them. For a certain number of students we will be even able to providefunding for the three-year stay at WU in Vienna! 
Please spread the word and help us to get applications from the best students from all over the world. The program will start in September 2011. Deadline for the applications is April 15, 2011.
Please find more information attached.
If you have questions, please contact us:
Prof. Dr. Eva Eberhartinger (eva.eberhartinger@wu.ac.at): International Tax Management
Prof. Dr. Erich Kirchler (erich.kirchler@wu.ac.at): Tax Psychology
Prof. Dr. Dr. h.c. Michael Lang (michael.lang@wu.ac.at): International Tax Law
Prof. Dr. Pasquale Pistone (pasquale.pistone@wu.ac.at): International Tax Law
Prof. Dr. Josef Schuch (josef.schuch@wu.ac.at): International Tax Law
Prof.Dr. Caren Sureth (caren.sureth@wu.ac.at): Taxation and Cross-Border Investment Decisions, Tax Accounting
Prof. Dr. Andreas Wagener (andreas.wagener@wu.ac.at): Cross Border Management
Prof. Dr. Alfons Weichenrieder (alfons.weichenrieder@wu.ac.at): Cross Border Management
Prof. Dr. Martin Zagler (martin.zagler@wu.ac.at): Public Finance
Administrative Issues: dibt@wu.ac.at
Many thanks and kind regards,
Eva Eberhartinger/Michael Lang/Martin Zagler


IAAP: Division 9: Economic Psychology
Erich Kirchler, University of Vienna, Austria
2010 09 12


Division 9: Economic Psychology

   Division 9, Economic Psychology, is a small but active section in IAAP. As a discipline, Economic Psychology is concerned with understanding human experience and human behaviour in economic contexts.

   Economic Psychology functions as a bridge between Economics and Psychology and dates back as far as 1900. Gabriel Tarde (1902) in France is assumed to be the first to use the term “economic psychology”. He pointed to the need to analyse economic behaviour from a psychological perspective. 

   Economics studies judgements and decisions on the use of scarce resources for the purpose of satisfying a multiplicity of human needs. People normally find themselves unable to satisfy all their needs, and are forced to choose between alternatives. Their choice of one option out of a set of various alternatives in turn involves the pain of renouncing the advantages of all the other options. In economics, decisions on the allocation of scarce resources are described on the premise of rationality and maximization of utility. Economics has constructed highly sophisticated formal decision-making models to explain and predict economic behaviour, starting from only a small number of axioms on the logic of human behaviour. These highly sophisticated, mathematical models often do not consider psychology. This is an unacceptable limitation argue economic psychologists and also behavioural economists.

   Classical economics, which traces its origins to Adam Smith’s (1776) “Wealth of Nations”, found itself challenged already towards the end of the 19th century. Thorstein Veblen (1899) opposed the basic assumptions of rationality and utility maximization with his findings on conspicuous consumption, showing that some goods become particularly desirable when the price rises. He expressed the criticism that economics does not consider cultural factors and social change. Wesley C. Mitchell (1914) predicted already at the beginning of the last century that slight but significant change would to be taking place in the attitude of economic theorists toward psychology. Around the same time, Clark (1918) wrote that economists may attempt to ignore psychology, but it is a sheer impossibility to ignore human nature in a science of human behaviour as is economics.

   In the late 1940s, George Katona and Günther Schmölders began to design a psychology of macroeconomic processes. Katona (1951) stresses the importance of psychology for economics and vice versa of economics for psychology by referring to economic research as consisting in the need to discover and analyze the forces behind economic processes, the forces responsible for economic actions, decisions and choices. Economics without psychology will not succeed in explaining important economic processes and psychology without economics will not succeed in explaining some of the most common aspects of human behaviour. Among economists, the voice of Herbert Simon attracted particular attention. He saw restrictions to the validity of the widely accepted rational model, especially in human’s limited cognitive capacities.

   Economics and psychology showed an interest in the other discipline early on. It has long been beyond dispute on both sides that psychology and economics have not only extensive common boundaries, but also an overlap in the questions they pose. The main argument was that not money, inflation rate, or unemployment figures by themselves influence each other, but that people act and interact in a given economic environment and thereby change it.

   Economic Psychology has gained considerable momentum in the last three decades. A major step towards institutionalisation and recognition in the scientific community have been the founding of the International Association for Research in Economic Psychology (IAREP; see http://www.iarep.org/) and the Society for the Advancement of Behavioral Economics (SABE; see http://www.sabeonline.org/) which join under the umbrella oranization “The International Confederation for the Advancement of Behavioral Economics and Economic Psychology” (ICABEEP; see http://www.iarep.org/ICABEEP.htm). The International Association for Research in Economic Psychology was founded primarily by European psychologists and economists which issues the “Journal of Economic Psychology” (http://www.elsevier.com/wps/find/journaldescription.cws_home/505589/description#description) the United States, the Society for the Advancement of Behavioral Economics issues the “Journal of Socio-Economics” (see http://www.elsevier.com/wps/find/journaldescription.cws_home/620175/description). The introduction of the “Journal of Economic Psychology“ in 1981, the “Journal of Socio Economics”, and especially the recognition of the research by Daniel Kahneman and Amos Tversky by the Nobel Prize Committee have made Economic Psychology to a prospering social science.

   Kirchler and Hölzl (2003, 2006) provide a review of the development of economic psychology and current research. Especially the topics dealt with in the Journal of Economic Psychology and papers published from 1981 to 2001give an overview of the diverse research areas and research topics in the field. Table 1 shows the content categories of publications.


Table 1: Research areas and topics in economic Psychology (Kirchler & Hölzl, 2006)

Economic psychology
marca.jpg - 389 bytes Theory and history (e.g., theoretical frameworks, life and work of scientist)
marca.jpg - 389 bytes Choice and decision theory
     Decision theory (e.g., decision making under risk, choice behaviour, preference formation)
     Cooperation / Game theory
marca.jpg - 389 bytes Socialization (e.g., lay theories, economic socialization)
marca.jpg - 389 bytes Firm (e.g., firm behaviour, entrepreneurship)
marca.jpg - 389 bytes Labour market (e.g., labour supply, work experiences, income and wage, unemployment)
marca.jpg - 389 bytes Market-place (e.g., pricing, price competition)
marca.jpg - 389 bytes Financial attitudes and behaviour
     Household financial behaviour  (e.g., saving, credit and loan, debts)
     Investment/stock market
marca.jpg - 389 bytes Money (e.g., money in general, euro)
marca.jpg - 389 bytes Inflation
marca.jpg - 389 bytes Tax (e.g., tax attitudes, evasion)
marca.jpg - 389 bytes Government and policy  (e.g., welfare, growth and prosperity)
Consumer psychology
marca.jpg - 389 bytesConsumer attitudes
marca.jpg - 389 bytesConsumer behaviour
marca.jpg - 389 bytesConsumer expectations
marca.jpg - 389 bytesMarketing and advertisement
Economic and environmental psychology

   At the ICAP Conference in Melbourne Tadeusz Tyszka gave a presidential address on “The role of moral sentiment in economic decision making”. We had two invited symposia on “Behavioral Finance” with presentations by Christine Roland-Lévy, Erik Hölzl, Tommy Gärling, David Leiser, Simon Kemp, and Erich Kirchler; and on “Decision making” with presentations by Tadeusz Tyszka, Dan Zakay, Katarzyna Domurat,
Anna Macko, Tomasz Zaleśkiewicz). The invited speaker, Gerrit Antonides gave an excellent presentation on “Behavioral economics applied: Suggestions for policy making”. Additional symposia and presentations focused on psychological aspects of the current financial and economic crisis.

   Division 9, Economic Psychology, is strongly related to IAREP and many economic psychologists are members of both organizations. The close relationship was, for example, demonstrated by the joint conference of IAAP Division 9 and IAREP in San Francisco, USA in 1998. In 2010 Division 9 members and IAREP members were also actively present at the ICAP Conference in Melbourne, Australia, at the IAREP/SABE Summer School in Moscow, Russia, which has successfully been organized by Elena Tougareva, and the IAREP/SABE/ICABEEP Annual Conference in Cologne, Germany, organized with high success by Detlef Fetchenhauer. When the next ICAP will take place in Paris, France, in 2014, IAREP might be willing to join in a common Division 9/IAREP event.

   I am honoured and proud to have been given the possibility to chair Division 9 and would like to thank the former presidents who created and designed the work of the division: Fred van Raaij and Christine Roland-Lévy as well as the outgoing president, Tadeusz Tyszka. I am also very grateful to Tomasz Zaleskiewicz for his work as division secretary in the past and current presidential period. A very warm welcome is given to David Leiser from Ben Gurion University, Israel, as a new president elect.

Since the end of the Melbourne conference, Division 9 has the following officials:

marca.jpg - 389 bytes President of Economic Psychology Division: Erich Kirchler
University of Vienna, Austria
marca.jpg - 389 bytes Past President: Tadeusz Tyszka, Leon Kozminski University, Warsaw, Poland
marca.jpg - 389 bytes President Elect: David Leiser, Ben Gurion University, Israel
marca.jpg - 389 bytes Secretary: Tomasz Zaleskiewicz, Warsaw School of Social Sciences and Humanities
Center for Research in  Economic Psychology, Poland
marca.jpg - 389 bytes Internet web page of Division 9: http://www.iaapsy.org/division9.

   Finally, I would like to motivate all members of Division 9 to contribute to the further development of the division and of the field of economic psychology by sending information about their research projects, new books and publications, conferences and workshops, seminars, summer schools and other related activities to the Division 9 secretary, Tomasz Zaleskiewicz. Tomasz will take care to add your news to our homepage [tomasz.zaleskiewicz@gmail.com]. Your contributions will be essential to make the division visible to a larger audience and to establish a network of scholars working in the field.

Erich Kirchler
President of Division 9 (2010-2014)


marca.jpg - 389 bytes Kirchler, E. & Hölzl, E. (2003). Economic Psychology. International Review of Industrial and Organizational Psychology, 18, 29-80.
marca.jpg - 389 bytes Kirchler, E. & Hölzl, E. (2006). Twenty-five years of the Journal of Economic Psychology (1981-2005): A report on the development of an interdisciplinary field of research. Journal of Economic Psychology, 27, 793-804.


Two major organizational and scientific projects have happened in recent months in our Division. Firts, we organized the board elections. We would like to thank all members who participated in the elections process and voted.

The new Division President is Professor Erich Kirchler from University of Vienna.
The President Elect is Professor David Leiser from Ben Gurion University in Israel.
The Division Secretary is Dr Tomasz Zaleskiewicz from Warsaw School of Social Sciences and Humanities in Poland.
The Division Board would like to thank the past President – Professor Tadeusz Tyszka – for his work and engagement.


Division 9 was also very active during the last IAAP Congress in Melbourne (Australia). This event gathered around 2000 psychologists and
other social science scientists and practitioners from all over the world.
Our Division organized three invited symposia about money management, economic decision making (rationality and moral aspects) and the tactile consumer. Moreover, there were two sessions concerning economic decision making and
financial markets and session about buying and money management. The Presidential Address was given by Tadeusz Tyszka. This lecture concerned the role of moral sentiments in economic decision making.


The members of Division 9 will also be present at the IAREP (International Association for Research in Economic Psychology) conference in Cologne that will be held in September 2010. Papers that will be presented during this conference will be related to such topics as economic decision making, financial markets, economic games, consumer behavior, fairness etc. More details can be found on the IAREP web page: www.iarep.org

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