behavioral economics

American  

[bih-heyv-yer-uhl ek-uh-nom-iks, eekuh-] / bɪˈheɪv yər əl ˌɛk əˈnɒm ɪks, ˌikə- /

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.

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Etymology

Origin of behavioral economics

First recorded in 1955–60

Example Sentences

“If you really know what you’re doing, are actively engaged and know how to use the clutch, it’s great,” said Andy Reed, head of behavioral economics research in Vanguard’s investment strategy group.

From MarketWatch • Mar. 21, 2026

"We used a mathematical model and tools from game theory and behavioral economics to understand the motivations behind tipping," says Dr. Snitkovsky.

From Science Daily • Mar. 2, 2026

The optimal New Year’s resolution works with human nature rather than trying to defy it, respecting the limits of motivation and leveraging the power of behavioral economics.

From The Wall Street Journal • Dec. 30, 2025

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 • Feb. 1, 2025

Kahneman received the Nobel Prize in economics in 2002 for these and other contributions that ended up underpinning the discipline now known as behavioral economics.

From Seattle Times • Mar. 27, 2024