Concept
Behavioral economics
Overview
Behavioral economics is the study of the psychological (e.g. cognitive, behavioral, affective, social) factors involved in the decisions of individuals or institutions, and how these decisions deviate from those implied by traditional economic theory.
Behavioral economics is primarily concerned with the bounds of rationality of economic agents. Behavioral models typically integrate insights from psychology, neuroscience and microeconomic theory.
Behavioral economics began as a distinct field of study in the 1970s and 1980s, but can be traced back to 18th-century economists, such as Adam Smith, who deliberated how the economic behavior of individuals could be influenced by their desires.
The 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.
Behavioral economics is widely used to understand and improve real-world economic decision-making, particularly in areas such as public policy, finance, and market design.
The field has become increasingly influential in informing economic analysis and policy design by incorporating empirically observed patterns of human behavior into standard economic models.
Overview adapted from Wikipedia (CC BY-SA 4.0; see the article history for authors).
Possible passages
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The actual price at which any commodity is commonly sold, is called its market price. It may either be above, or below, or exactly the same with its natural price. The market price of every particular commodity is regulated by the proportion between the quantity which is actually brought to market, and the demand of those who are willing to pay the natural price of the commodity,…
Adam Smith, An Inquiry Into the Nature and Causes of the Wealth of Nations
States what Behavioral economics is; the author is tied to Behavioral economics in the knowledge graph.
In our economic experience, no more than elsewhere, is satisfaction an ultimate and self-explanatory term. Satisfaction carries with it always a reference to the level of power and interest that makes it possible and on which it must be measured. To seek satisfaction for its own sake or to hinge one's interest in science or art upon their ability to serve the palpable needs of the present moment--these, together…
John Dewey, Creative Intelligence
States what Behavioral economics is.
Corn, it has already been observed, is, at distant periods of time, a more accurate measure of value than either silver or, perhaps, any other commodity. When, after the discovery of the abundant mines of America, corn rose to three and four times its former money price, this change was universally ascribed, not to any rise in the real value of corn, but to a fall in the real value of silver. If, during the…
Adam Smith, An Inquiry into the Nature and Causes of the Wealth of Nations
The author is tied to Behavioral economics in the knowledge graph.
Related ideas
- Artificial intelligence
- Game theory
- Distributive justice
- Hedonism
- Springer Science+Business Media
- Herbert A. Simon
- Interdisciplinarity
- Counterfactual thinking
- Adam Smith
- Fitness (biology)
- Mathematics
- The Guardian
- Cybernetics
- Neuroscience
- Cognitive revolution
- Psychology
- Political philosophy
- Psychotherapy
- Science
- Positivism
- Cabinet Office
- The New York Times
- Utilitarianism
- University of Pennsylvania
Place in the tradition
Part of Libertarianism.