Overview
Behavioral economics combines insights from psychology and economics to understand how people make decisions. It challenges the traditional notion of rationality by highlighting the various biases and heuristics that influence our choices. Concepts like loss aversion, nudges, and the framing effect ...
Key Terms
Example: Using a rule of thumb to estimate costs.
Example: Choosing not to invest due to fear of losing money.
Example: Placing healthy foods at eye level in a cafeteria.
Example: Describing a surgery as having a 90% success rate vs. a 10% failure rate.
Example: Using the first price seen as a reference for future purchases.
Example: Believing you can predict stock market movements accurately.
Related Topics
Key Concepts
HeuristicsLoss AversionNudgesFraming Effect