behavioral economics

[bih-heyv-yer-uhl ek-uh-nom-iks, eekuh-]

noun

(used with a singular verb)

1. the branch of economics dealing with the effects of psychological, emotional, cultural, and social factors on individual or group economic decision-making, as distinguished from classical economics, which assumes that people will make the optimal economic decisions based on rational self-interest and utility.

Word History and Origins

Origin of behavioral economics¹

First recorded in 1955–60

Example Sentences

These barriers are known in behavioral economics as "friction," said Dan Ariely, a psychology and behavioral economics professor at Duke University and a founding member of the Center for Advanced Hindsight.

From Salon

Because even behavioral economics sometimes sees it as rational and scientific, and any deviation from it needs to be explained as some weird paradox.

From Salon

Thomas Piketty and his colleagues work on economic inequality, Alan Krueger and David Card work on minimum wage, Kahneman works on behavioral economics.

From Salon

Jones and I were talking about this complicated relationship between peril and the human psyche the other day, which she has studied for years, digging into “all the research on psychology and behavioral economics — on how people make decisions about risk.”

From Los Angeles Times

“People are starting to think through needs versus wants a little bit more,” Elizabeth Schwab, founding chair of The Chicago’s School’s graduate behavioral economics program, said.

From Salon