Introduction to Behavioural Economics (Behavioural Economics)
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Last updated 21 Mar 2021
Behavioural Economics tries to mix insights from Psychology with Economics, and looks at problems through the eye of a “Human”, rather than an “Econ”.
Behavioural economics uses insights from psychology to explain why people make apparently irrational decisions such as why people eat too much, take too little exercise, or do not save enough for retirement.
Rory Sutherland from Ogilvy has argued that:
"In the economist's mind, people are calculating rationalists, merely seeking to maximize their own utility in a world of perfect information. In fact, the human is far less a rational calculating machine than an anxious, moralizing, herd-like, reciprocating, image-conscious, story-telling game theorist."