Behavioural economics and economic behaviour in classical Athens

This essay critiques existing debates on the ancient Greek economy from two directions. First, it applies the findings of behavioural economics to critique the recent resurgence of formalist assumptions of economic rationality among some (but by no means all) scholars operating under the banner of the New Institutional Economics (NIE). I show that the founders of NIE did not subscribe to the 'rational actor' model in its crude form, and that they left room in their models for bounded rationality, behavioural divergences from the optimising model, and behaviour influenced by cultural norms. Second, I critique work from the substantivist tradition, which emphasised the incompatibility of Greek cultural norms with the pursuit of profit, a view based on a misreading of the sources and the extrapolation of idiosyncratic philosophical views to the population at large. A hybrid approach can combine the best aspects of both traditions whilst discarding the excesses of hardline versions of formalism and substantivism.