behavioral economics
Mind meets markets
Behavioral economics studies how psychological factors influence economic decisions.
Traditional economics assumes people act rationally to maximize benefit, but behavioral economics examines why they often don't—succumbing to cognitive biases, emotional impulses, or mental shortcuts.
Concepts like loss aversion, anchoring, and the endowment effect explain why people fear losses more than equivalent gains, fixate on initial numbers, or overvalue what they already own.
Behavioral economics explains why people keep gym memberships they never use.
Gentle push to prompt
- loss aversionSetbacks sting more than gains please
- anchoringFastening securely to position
- framing effectBias from how options are worded
- mental accountingCategorizing money by source
Prioritizing others' wellbeing
- reciprocityMutual exchange of actions
- fairnessJust and equal treatment
- trustConfidence in another
- self-interestConcern for personal advantage
social norms · intrinsic motivation · cooperation · loss aversion · temptation · self-control · willpower · goal setting
Systematic errors in judgment
- heuristicsPractical problem-solving shortcuts
- confirmation biasPreferring belief-supporting information
- hindsight biasIllusion of prior knowledge
- optimism biasExpecting favorable outcomes despite odds
overconfidence · self-serving bias · recency bias · gambler's fallacy · bandwagon effect · decoy effect
Money reserved for post-career
- organ donationGifting body parts for transplant
- tax complianceFollowing taxation laws
- health interventionsActions to improve wellness
- energy conservationUnchanging total in closed systems
financial literacy · consumer protection · public policy · smoking cessation
Strategic game theory scenario
- field experimentResearch in actual conditions
- A/B testingComparing two variants' performance
- eye trackingMeasuring visual fixation points
- neuroimagingVisualizing nervous system structure
nudge
Gentle push to prompt
- loss aversionSetbacks sting more than gains please
- anchoringFastening securely to position
- framing effectBias from how options are worded
altruism
Prioritizing others' wellbeing
- reciprocityMutual exchange of actions
- fairnessJust and equal treatment
- trustConfidence in another
self-interest · social norms · intrinsic motivation · cooperation · loss aversion · temptation · self-control · willpower · goal setting · habit formation
cognitive biases
Systematic errors in judgment
- heuristicsPractical problem-solving shortcuts
- confirmation biasPreferring belief-supporting information
- hindsight biasIllusion of prior knowledge
optimism bias · overconfidence · self-serving bias · recency bias · gambler's fallacy · bandwagon effect · decoy effect
retirement savings
Money reserved for post-career
- organ donationGifting body parts for transplant
- tax complianceFollowing taxation laws
- health interventionsActions to improve wellness
energy conservation · financial literacy · consumer protection · public policy · smoking cessation
prisoner's dilemma
Strategic game theory scenario
- field experimentResearch in actual conditions
- A/B testingComparing two variants' performance
- eye trackingMeasuring visual fixation points
- academic fieldsmathematics, biology, chemistry, physics, history
- economicssupply and demand, inflation, GDP, GNP, gross domestic product
- social sciencessociology, anthropology, psychology, political science, criminology
- behavioral economicsloss aversion, nudge, anchoring, cognitive bias, heuristics
- behavioral scienceconditioning, reinforcement, stimulus, response, learning theory
- behavioral sciencespsychology, cognitive psychology, social psychology, developmental psychology, clinical psychology
economy, behavior, economic, economical, economics, misbehave, misbehavior, behaving, behaved