Overview
Behavioral economics is a fascinating field that merges psychology with economic theory to explain why people often make irrational choices. It challenges the traditional view that humans are always rational actors, highlighting how emotions, biases, and social influences can lead to unexpected beha...
Key Terms
Example: Placing healthy foods at eye level in a cafeteria.
Example: People are more upset about losing $20 than they are happy about gaining $20.
Example: If a shirt is priced at $100 and then marked down to $70, the $100 serves as an anchor.
Example: Describing a surgery as having a 90% success rate versus a 10% failure rate.
Example: Choosing a brand you recognize over an unfamiliar one.
Example: A student believing they will score higher than average on a test.