Acting irrationally – Behavioral Economics and the Consumer Affect
July 19, 2018
Behind every action is a behavior.
Neoclassical economics assumes people act rationally and make decisions in their best interest; unfortunately, this is often not the case. A new wave of behavioral science, called behavioral economics, puts irrational behavior at the center of study and research.
Taking a closer look, behavior economists recognize we do not always act in a rational way that is in our own self-interests. Based on the assumption that decision-making is often ‘predictably irrational,’ behavioral economist’s research explores how these decision errors follow certain patterns that are well understood and can be used to influence a desired outcome.
In this article, we will provide an overview of some of the principles that drive decision making and explore how these principles can be used to promote a sustainable behavioral change, and ultimately, use “nudges’ to achieve a desired outcome.
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