Behavioral economics can shed light on the decisionmaking processes of the poor from "summary" of Poor Economics by Abhijit Banerjee,Esther Duflo
Behavioral economics offers a valuable lens through which we can understand the decision-making processes of the poor. By examining how individuals, particularly those living in poverty, make choices in the face of limited resources and challenging circumstances, we gain insights that can inform more effective policies and interventions. One key insight of behavioral economics is that individuals often do not act in purely rational ways, as traditional economic models would suggest. Instead, people's decisions are influenced by a variety of psychological and social factors, such as cognitive biases, social norms, and cultural beliefs. For the poor, these influences can be particularly impactful, shaping their choices in significant ways. For example, behavioral economic...
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