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

We’d stay up late debating string theory, behavioral economics, even the origins of satire.

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But here’s where behavioral economics and investment strategy diverge: I don’t need everyone to follow through.

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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.

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

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

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