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Preferred term

behavioral economics  

Definition

  • Behavioral economics uses insights from human psychology to investigate how individuals actually make decisions. In contrast to neoclassical economics theory, which generally posits that individuals are rational decision makers who are capable of maximizing personal welfare, behavioral economics theorists build models of economic decision making that take account of human errors and limitations. [Source: Encyclopedia of Business Ethics and Society; Economics, Behavioral]

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https://concepts.sagepub.com/social-science/concept/behavioral_economics

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