8.3: Introduction to Behavioral Economics

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What you’ll learn to do: describe the behavioral economics approach to understanding decision making

Shoppers sit outside of a clothing store.

If a friendly stranger handed you $20, how would you feel? What if you lost $20 the next week? Do you think that you’d feel sad about it, or would just be happy that you broke even? In this section, you’ll see that most people would still be sad about the $20 loss. Economic decisions are not always logical. Read on to find out why!

Introduction to Behavioral Economics. Authored by: Steven Greenlaw and Lumen Learning. License: CC BY: Attribution

Shoppers on Oxford Street near Marble Arch, London. People and Paths. Authored by: Gyles Glover. Provided by: flickr. Located at: https://www.flickr.com/photos/gylesglover/16203523624/. License: CC BY: Attribution