This handbook examines and addresses an important stream of research where the starting assumption is that decision-makers are, for the most part, relatively smart or rational. This approach contrasts with a theme running through much contemporary work in which individuals’ behaviour is deemed irrational, biased and error-prone, often due to how the brain is hardwired. In the smart people or bounded rationality approach, where errors or biases occur and when social dilemmas arise, often, improving the decision-making environment can repair these problems without hijacking or manipulating the preferences of individuals. The handbook covers a wide range of themes from micro to macro, including economic psychology, heuristics, fast and slow
thinking, neuro-economics, experiments, the capabilities approach, institutional economics, methodology, nudging, ethics and public policy. It argues that neoclassical decision-making benchmarks are typically not the gold standard for best practice.