Behavioral economics is the study of the psychological, cognitive, emotional, cultural and social factors involved in the decisions of individuals or institutions, and how these decisions deviate from those implied by classical economic theory. Behavioral economics is primarily concerned with the bounds of rationality of economic agents. Behavioral model… See more
Early classical economists included psychological reasoning in much of their writing, though psychology at the … See more
Bounded rationality is the idea that when individuals make decisions, their rationality is limited by the tractability of the decision problem, their cognitive limitations and the time available. Herbert A. … See more
In 1979, Kahneman and Tversky published Prospect Theory: An Analysis of Decision Under Risk, that used cognitive psychology to explain various divergences of economic decision making from neo-classical theory. Kahneman … See more
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… See more
Behavioral economics aims to improve or overhaul traditional economic theory by studying failures in its assumptions that people are rational and selfish. Specifically, it studies the biases, tendencies and heuristics o… See more
Behavioral finance is the study of the influence of psychology on the behavior of investors or financial analysts. It assumes that investors are not always rational, have limits to their self-control and are influenced by their own … See more
Behavioral game theory, invented by Colin Camerer, analyzes interactive strategic decisions and behavior using the methods of game theory, experimental economics, and experimental psychology. Experiments include test… See more