| Abstract | Behavioral economics integrated with psychology, experimental economics and system economics has gained enormous development in expected utility, endowment effect, hyperbolic discounting and social preferences four aspects, and it also has a great significance in research paradigm, rationalism, substitution, complementarity and frame of reference theory. This paper introduces rising phases and main contribution of behavioral economics briefly, and then its meaning to modern economics is analyzed and discussed, which includes: 1) spread the economics research paradigm, which means the traditional paradigm “land plus labor to commodity” is spread to “land plus labor to commodity to labor again”. The main value of people is established again in economics; 2) lower the rational hypothesis. Limited rationalism is established from three levels and weak stochastic theories in fixed utility theories is also built to make an attempt to resolve individual and group relationship; 3) imply the complex relations among substitution, complementarity and all parallel movement, which makes a foundation between complementarity research and its relation with substitution; and wholly 4) initiate the new way between individual and group. Frame of reference theory is a basis of local equilibrium theory applied to establish general equilibrium theory in whole. The evolvement of behavioral economics in above four aspects is available to combine main-stream economics with behavioral economics further and to form higher-level logic deductive system by conforming economics. |