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: 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. What is nudge theory? Created with Sketch. In the book Nudge, Richard Thaler and Cass Sunstein define a “nudge” as a policy that influences people to make more desirable decisions via psychological, environmental, and social cues. Examples include putting healthy food at eye level instead of junk food. People still have free will —nothing is banned or mandated—but it’s easier to do what’s best for themselves in the long run.