What is Behavioral Economics?
Behavioral Economics is about studying how individuals and groups make choices based on their feelings, thoughts, and social surroundings, rather than just following traditional economic theories. It combines ideas from psychology, neuroscience, and basic economic theory to understand how individuals decide on economic matters and what influences those decisions. It looks at how individuals might not always make decisions in the most logical or predictable ways and explores why this happens.
Key Takeaways:
- Behavioral Economics combines psychology, neuroscience, and economics to understand decision-making.
- Factors like bounded rationality, cognitive biases, and herd mentality influence decision-making.
- Principles like bounded rationality, framing, and heuristics guide decision-making in behavioral economics.
- Examples like the Swachh Bharat Mission and nudge policies demonstrate the practical application of behavioral economics.
Table of Content
- History of Behavioral Economics
- Nudge Theory
- Factors Influencing Behavior
- Principles of Behavioral Economics
- Applications of Behavioral Economics
- Examples of Behavioral Economics
- Criticism of Behavioral Economics
- What do Behavioral Economists Do?
- Behavioral Economics – FAQs