Title: Behavioral Economics | Psychology Today
Headings: Behavioral Economics
Behavioral Economics
Contents
Understanding Behavioral Economics
What is the difference between traditional economics and behavioral economics?
Why is behavioral economics important?
Do economic incentives to change behavior work?
Irrationality and Behavioral Economics
What are some examples of bias in behavioral economics?
What is the main drawback in using heuristics to solve problems?
What are some examples of heuristics that lead to irrational choices?
Does having too many options lead to poor decision-making?
How Can You Influence People's Behavior?
What is nudge theory?
What is an example of a nudge?
What are some nudging techniques?
Is nudging ethical?

Content: Does having too many options lead to poor decision-making? Created with Sketch. People are often limited by the time they have to make a decision. When too many options are available, it’s not possible to make a rational choice—you could take forever simply gathering information. As a result of this choice overload, people can experience decision paralysis, mental fatigue, and disappointment or dissatisfaction with their choice. How Can You Influence People's Behavior? Many people are inclined to choose an option that brings instant pleasure, rather than the one which will beget long-term satisfaction at the expense of short-term gratification. Using behavioral economics, individuals and institutions can take advantage of this to manipulate people into a specific course of action or purchase. One way that a person can be influenced is through a "nudge," a combination of positive reinforcement and indirect suggestions encouraging specific behaviors. Not all of these manipulations are harmful, as behavioral economics can be used to get people to make positive behavioral changes, such as eating less or saving more money.