All tagged Bahavioral

Behavioral Economics in Policy Making

To put it simply, the field of behavioral economics evolved as an increasing number of economists acknowledged the contributions of psychologists, who revealed that individuals do not act as traditional economic theories assumed—namely, as rational agents who consistently make decisions to maximize their expected benefits. While traditional economics recognizes decision-making based on rational economic theory, where individuals assumingly balance the benefits and costs of different actions, behavioral economics focuses on the concept that people lack self-control, make inconsistent choices over time, show selective attention, and respond unconsciously to an array of influences (Moffitt et al., 2023). People's decisions tend to be influenced by the social context in which they are made; they typically respond unconsciously to how a choice is framed and presented, and they cannot effectively navigate logistical challenges that hinder the best possible decision.