Behavioral economics

Before the theories of behavioral economics, economics was a generally straightforward field. Adding this new approach to consumer behavior makes us seem less like robots acting only as economics expects us to act and more like the more or less irrational beings we are. As Swiss economist, Bruno Frey put it, “The agent of economic theory is rational, selfish, and his tastes do not change.” The Homo Economicus, whom psychologist Daniel Kahneman refers to as “Econs” focuses on rationality to understand how choices are made; however, Kahneman was determined to prove rationality is not always the be-all and end-all of economics. Daniel Kahneman is one of only a couple non-economists and the first psychologist to win the Nobel prize in Economics…

In this chapter, I here analyze economic aspects of Lee Child’s novel Tripwire. Here, I analyze Jack Reacher and other major characters. This thesis deals with American lifestyle and culture which offers different perspective to the field of literature. The perspective of my analysis is economic contract theory or in another word “Behavioral Economics”. I also focus on exploring evils of capitalism by discussing the ideology of “Economic Man”. Behavior of an individual is always mapped through…

(Chapter 4). Behavioral economics expects individuals to occasionally deviate from rational behavior, sometimes acting impulsively. In the case of low-income individuals, this non-optimal behavior may conflict with long-term savings goals; however, the lack of willpower is a result of the lack of ‘bandwidth’ and attention remaining given the constant strain of poverty and scarcity. (Savings Policy; Chapter One). Given this perspective, individuals with comfortably higher-incomes avoid the…

Anchoring is a cognitive bias referring to the fact that individuals choosing numeric values are influenced by momentarily present information, without being aware of it. It describes the common tendency to rely on the first piece of information offered when making decisions. Anchors can be eternally provided or self generated. The broad idea of anchoring can be seen through a quality seen in goslings. Dan Ariely’s describes in his book, Predictable Irrationality, that, “goslings, upon breaking out…

picking between two cereals to deciding who to take on a date, decisions affect us every day. Decisions might be perceived as easy to make but there is reason behind why we make the decisions we do. The book Predictably Irrational by Dan Ariely explores how we make decisions. Dan Ariely is a Professor of Psychology and Behavioral Economics at Duke University. In addition, he founded the Center for Advanced Hindsight, and is the author of multiple books (Ariely). Ariely uses the concept of…

Gender Differences in Trifles Susan Glaspell's play, "Trifles", attempts to define one of the main behavioral differences between man and woman. For most of the story, the two genders are not only geographically separated, but also separated in thought processes and motive, so that the reader might readily make comparisons between the two genders. Glaspell not only verbally acknowledges this behavioral difference in the play, but also demonstrates it through the characters'…

Economics is how we use our resources when there is scarcity. Time is a scarce resource, and people need to use it wisely. There are tradeoffs and differing amounts of utility people receive with what they do with their time. One-way people could spend their time is at the gym. While some people easily make a habit of going to the gym, others struggle to go and work out. People need to make decisions and they face tradeoffs with how to spend their time. One thing a lot of people say, is I…

Relationship of The Nudge theory to Microeconomics The nature of decisions that are made in the business environment vary because of many reasons. Human actions or behaviors play a primary function in influencing the business sector. Microeconomics deals with the impact of human beings, through their actions and practices in shaping business industry. Their actions form part of behavioral economics. The behavioral economics sector is mainly influenced or determined by the concepts of the nudge…

Traditional economics assumes that human beings are rational and will consider all their options before choosing the best choice available to them. In his book “Predictably Irrational: The Hidden Forces That Shape Our Decisions,” however, behavioral economist Dan Ariely points out that human beings cannot be depended on to behave rationally and that expectations, emotions, social norms, and other invisible, apparently illogical forces distort our reasoning abilities. While the field of…

problems and social ills are solved by scientific technology applied to human conduct,called social behavioral engineering. Skinner shows us the society and ideology of Walden Two through the eyes of outsiders who show varying degrees of skepticism or enthusiasm for the behaviorally engineered society. Skinner shows us many diifernt ways he would correct society. The examples are , Education is based on freedom and self-motivation. Structure classrooms with the threat of bad grades do not exist.…