Behavioral Economics

Behavioral Economics

Why do we often think we know what we want, only to be disappointed with our purchases and choices? Behavioral economics combines insights from the fields of psychology and economics to elucidate decision making, with an eye towards outcomes that might be deemed irrational in some frameworks (including classic economic theories). Whereas a person might be expected to weigh the benefits and drawbacks and then choose the best possible option, behavioral economics demonstrates that people rarely behave in this manner. Individuals are often influenced by emotion or innate bias (such as future discounting) to make choices that are not in their best interests in the long run. As ab awareness of behavioral economics increases, Individuals and institutions have attempted to nudge people, especially in the realm of consumer good or financial savings. 

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