Introducing Behavioral Economics: The Science of Making Real-World Choices
In this part . . .
Behavioral economics is about understanding how real people behave in real-world settings. In this part, I examine the role that assumptions play in developing robust economic theories and economic analyses.
I also discuss the role of the brain’s architecture in this part. The decision-making process and people’s choices are hugely impacted by how the brain is structured and how it evolves into adulthood.
Finally, I consider the role of incentives in motivating people’s behavior. In behavioral economics, as in conventional economics, economic incentives matter — the difference is that in behavioral economics, what affects people’s decision making is much more complex and nuanced.