behavioral economics

[ bih-heyv-yer-uhl ek-uh-nom-iks, eekuh- ]

noun

, (used with a singular verb)

1. the branch of economics dealing with the effects of psychological, emotional, cultural, and social factors on individual or group economic decision-making, as distinguished from classical economics, which assumes that people will make the optimal economic decisions based on rational self-interest and utility.

Word History and Origins

Origin of behavioral economics¹

First recorded in 1955–60

Example Sentences

“People are starting to think through needs versus wants a little bit more,” Elizabeth Schwab, founding chair of The Chicago’s School’s graduate behavioral economics program, said.

From Salon

Google retained an entire “behavioral economics team,” which conducted multiple studies as to consumer behavior when it comes to various search trends and default arrangements.

From Slate

Airlines use behavioral economics, which combines psychology with traditional economics, to exploit biases that drive us to pay more than necessary.

From Los Angeles Times

Kahneman received the Nobel Prize in economics in 2002 for these and other contributions that ended up underpinning the discipline now known as behavioral economics.

From Seattle Times

Professor Kahneman, who was long associated with Princeton University and lived in Manhattan, employed his training as a psychologist to advance what came to be called behavioral economics.

From New York Times