What is behavioral economics?
Q: What is behavioral economics?
A: Behavioral economics is a part of economics that combines psychology with economics to better understand how people make decisions.
Q: Why does economics normally not consider the way humans actually think?
A: Economics normally does not consider the way humans actually think because it simplifies decision-making to make economic models easier to understand.
Q: What do economists assume about people in terms of decision-making?
A: Economists assume that people are rational, meaning they make good decisions at the right times using all information.
Q: How do people behave in real life that differs from the assumptions made by economists?
A: In real life, people may have problems with self-control, problems with time, and make different choices depending on how decisions are presented to them.
Q: What is the focus of behavioral economists?
A: The focus of behavioral economists is on the problems and limitations that result when real humans are faced with decisions.
Q: How can behavioral economics help in understanding the world?
A: Behavioral economics can help in understanding the world by taking into account the way real humans think and make decisions, instead of assuming that everyone is perfectly rational.
Q: What is the main difference between traditional economics and behavioral economics?
A: The main difference between traditional economics and behavioral economics is that traditional economics assumes that people are rational, while behavioral economics takes into account the way real humans actually make decisions.
