Behavioral economics explores how psychological factors influence economic decisions from "summary" of Economics for Beginners by Andy Prentice,Lara Bryan
Behavioral economics delves into the intriguing ways in which our brains can sometimes lead us astray when making economic decisions. Traditional economics assumes that people are rational beings who make logical choices based on careful analysis of all available information. However, in reality, our decisions are often influenced by a myriad of psychological factors that can lead us to behave in ways that seem irrational or illogical. One of the key insights of behavioral economics is that human beings tend to rely on mental shortcuts, or what are known as "heuristics," when making decisions. These heuristics are often based on emotions, biases, or social norms rather than on a rational assessment of all the relevant information. For example, we may be influenced by peer pressure, our desire to conform to societal expectations, or our fear of missing...
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