In economics, I rarely recommend journal articles as primary background reading to undergraduate students. Most of them are simply too technical, even if they mark milestones in the development of the discipline. Bruni and Sugden’s 2007 paper is one exception to this rule. In a subject area, where history of thought topics normally take a back seat, this article maps out the point where psychology and economics parted company.
The authors outline how economics was originally informed by insights from psychology –quite a few of which are close to the more modern insights underpinning behavioural economics. They also chart in detail how Pareto’s influence was crucial in separating economics off as an independent discipline, dedicated to exploring optimal decision making with a given, fixed and discoverable preference set for individual decision makers and how Pareto attempted to prove the validity of this axiomatic assumption.
The original paper appeared in the Economic Journal and should be available to any student with access to a college library. For others, it occasionally surfaces on the internet. I would recommend it to anyone interested in behavioural economics: it pinpoints the moment at which two disciplines that should stand in a symbiotic relationship became disconnected and helps understand how and why the discrepancies between the two have developed since.
Source: Bruni, L. and Sugden, R. (2007) “The road not taken: how psychology was removed from economics, and how it might be brought back” The Economic Journal 117(516), pp.146–173.