Behavioral Economics For Dummies book cover

Behavioral Economics For Dummies

Author:
Morris Altman
Published: February 28, 2012

Overview

A guide to the study of how and why you really make financial decisions

While classical economics is based on the notion that people act with rational self-interest, many key money decisions—like splurging on an expensive watch—can seem far from rational. The field of behavioral economics sheds light on the many subtle and not-so-subtle factors that contribute to our financial and purchasing choices. And in Behavioral Economics For Dummies, readers will learn how social and psychological factors, such as instinctual behavior patterns, social pressure, and mental framing, can dramatically affect our day-to-day decision-making and financial choices.

Based on psychology and rooted in real-world examples, Behavioral Economics For Dummies offers the sort of insights designed to help investors avoid impulsive mistakes, companies understand the mechanisms behind individual choices, and governments and nonprofits make public decisions.

  • A friendly introduction to the study of how and why people really make financial decisions
  • The author is a professor of behavioral and institutional economics at Victoria University

An essential component to improving your financial decision-making (and even to understanding current events), Behavioral Economics For Dummies is important for just about anyone who has a bank account and is interested in why—and when—they spend money.

A guide to the study of how and why you really make financial decisions

While classical economics is based on the notion that people act with rational self-interest, many key money decisions—like splurging on an expensive watch—can seem far from rational. The field of behavioral economics sheds light on the many subtle and not-so-subtle factors that contribute to our financial and purchasing choices. And in Behavioral Economics For Dummies, readers will learn how social and psychological factors, such as instinctual behavior patterns, social pressure, and mental framing, can dramatically affect our day-to-day decision-making and financial choices.

Based on psychology and rooted in real-world

examples, Behavioral Economics For Dummies offers the sort of insights designed to help investors avoid impulsive mistakes, companies understand the mechanisms behind individual choices, and governments and nonprofits make public decisions.

  • A friendly introduction to the study of how and why people really make financial decisions
  • The author is a professor of behavioral and institutional economics at Victoria University

An essential component to improving your financial decision-making (and even to understanding current events), Behavioral Economics For Dummies is important for just about anyone who has a bank account and is interested in why—and when—they spend money.

Behavioral Economics For Dummies Cheat Sheet

Behavioral economics is about bringing reality into economic analysis. It borrows from psychology, sociology, politics, and institutional economics (which focuses on the rules of the economic game) to describe and explain human behavior and economic phenomena. Behavioral economics builds upon conventional economics, offering more tools for understanding why people behave the way they do when it comes to income, wealth, ethics, and fairness. It uses prospect theory to describe the choices that the typical person makes.