George Katona

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George Katona (Nov. 6, 1901, June 18, 1981) was a Hungarian-born American psychologist, and Professor at the University of Michigan, who was one of the first to advocate a rapprochement between economics and psychologists. He is known as one of the founding fathers of old behavioral economics.


  • Unlike pure theorists, we shall not assume at the outset that rational behavior exists or that rational behavior constitutes the topic of economic analysis. We shall study economic behavior as we find it. In describing and classifying different reactions, as well as the circumstances that elicit them, we shall raise the question whether and in what sense certain reactions may be called “rational.” After having answered that question and thus defined our terms, we shall study the fundamental problem: Under what conditions do more and under what conditions do less rational forms of behavior occur?
    • George Katona (1951). Psychological Analysis of Economic Behavior. McGraw-Hill, New York. p. 16; as cited in: Erik Angner and George Loewenstein. "Behavior economics," in: Philosophy of Economics, (2012), p. 657
  • Intervening variables are essential to psychological analysis because without them our description of economic behavior would remain incomplete, our understanding of behavior limited, and our predictions of future behavior incorrect.
    • George Katona (1951). Psychological Analysis of Economic Behavior. McGraw-Hill, New York. p. 31
  • Motives, attitudes, and expectations of consumers and businessmen play a significant role in determining spending, saving, and investing and that modern psychology provides conceptual as well as methodological tools for the investigation of economic behavior.
    • George Katona, Psychological economics. Elsevier, 1975.
  • During the past three decades numerous empirical studies of economic behavior have been carried out and their theoretical foundation has been clarified. There was a rapid development and articulation of data, theory, and methodology. A new discipline of behavioral economics was emerging [which] consists of the empirical investigations of the behavior of businessmen and consumers in one country in one time. Generalizations about economic behavior emerge gradually by comparing behavior observed under different circumstances.
    • George Katona, and James N. Morgan (1980). Essays on behavioral economics. Univ of Michigan Survey Research. p. 3

Quotes about George Katona[edit]

  • Assuming the division of behavioral economics into old and new, the paper begins to argue that old behavioral economics began with the works of two giants – George Katona and Herbert Simon during the 1950s and early 1960s. The contributors of Herbert Simon are well established, thanks to the popularity of bounded rationality and satisficing, and his being award Noble Prize in economics. However, economists are much less familiar with the contributions of George Katona that can be viewed as the father of behavioral economics... Katona was also misunderstood by various economists when he was attempting to create a psychologically based economics that rejected the mechanistic psychology of neoclassical economics and introducing the survey method to economic research that he had been using in his experimental psychology research previously. He also had influenced various economists during their debates in the 1950s without given the credit for.
Many historians of behavioral economics limit Katona's contributions to the start of behavioral economics only to his contributions to macroeconomics. However... Katona's behavioral economics included his contributions to macroeconomics (bringing realism to Keynesian consumption function and consumption behavior), micro-economics (business behavior, the rationality assumption, etc.), public finance and economic policy, and his introduction of the survey method... Katona attempted to bring realism to economic analysis – through psychological concepts – beginning with his early days of research in Germany which coincided with German hyper inflation- and continued whether working at New school for Social Research, Chicago University's Cowles Commission, the U.S. Department of Agriculture, or the University of Michigan's Survey Research Center.
  • Hamid Hosseini, . "George Katona: A founding father of old behavioral economics." The Journal of Socio-Economics 40.6 (2011): 977-984.

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