28 Facts About Behavioral economics

Behavioral economics is primarily concerned with the bounds of rationality of economic agents.

The study of behavioral economics includes how market decisions are made and the mechanisms that drive public opinion.

Status of behavioral economics as a subfield of economics is a fairly recent development; the breakthroughs that laid the foundation for it were published through the last three decades of the 20th century.

Behavioral economics is still growing as a field, being used increasingly in research and in teaching.

Re-emergence of psychology within economics that allowed for the spread of behavioral economics has been associated with the cognitive revolution.

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Behavioral economics economists engage in mapping the decision shortcuts that agents use in order to help increase the effectiveness of human decision-making.

Nudge is a concept in behavioral science, political theory and economics which proposes positive reinforcement and indirect suggestions as ways to influence the behavior and decision making of groups or individuals—in other words, it's "a way to manipulate people's choices to lead them to make specific decisions".

Conventional Behavioral economics assumes that all people are both rational and selfish.

Behavioral economics identifies a number of these biases that negatively affect decision making such as:.

Behavioral economics finance is the study of the influence of psychology on the behavior of investors or financial analyst.

For example, behavioral law and economics scholars studying the growth of financial firms' technological capabilities have attributed decision science to irrational consumer decisions.

Behavioral economics finance has emerged as an alternative to these theories of traditional finance and the behavioral aspects of psychology and sociology are integral catalysts within this field of study.

Behavioral economics has been applied to intertemporal choice, which is defined as making a decision and having the effects of such decision happening in a different time.

Behavioral economics caught on among the general public with the success of books such as Dan Ariely's Predictably Irrational.

Applications for behavioral economics include the modeling of the consumer decision-making process for applications in artificial intelligence and machine learning.

Applications of behavioral economics exist in other disciplines, for example in the area of supply chain management.

Behavioral economics' usefulness applies beyond environments similar to stock exchanges.

Behavioral economics hypothesized that rational actors cannot be responsible for stock prices in the short-run due to uniquely large fluctuations.

David Gal has argued that many of these issues stem from behavioral economics being too concerned with understanding how behavior deviates from standard economic models rather than with understanding why people behave the way they do.

Behavioral economics has referred to behavioral economics as a "triumph of marketing" and particularly cited the example of loss aversion.

Behavioral economics economists responded to these criticisms by focusing on field studies rather than lab experiments.

Epistemological, ontological, and methodological components of behavioral economics are increasingly debated, in particular by historians of economics and economic methodologists.

Experimental Behavioral economics is the application of experimental methods, including statistical, econometric, and computational, to study economic questions.

Experimental Behavioral economics have expanded to understand institutions and the law .

NeuroBehavioral economics is an interdisciplinary field that seeks to explain human decision making, the ability to process multiple alternatives and to follow a course of action.

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In mainstream Behavioral economics, expected utility and the concept of rational agents are still being used.

Behavioral economics emerged to account for these anomalies by integrating social, cognitive, and emotional factors in understanding economic decisions.

NeuroBehavioral economics adds another layer by using neuroscientific methods in understanding the interplay between economic behavior and neural mechanisms.