What Exactly Is Behavioral Economics?

Behavioral economics emerged around the 1980s as a discipline that blends the knowledge from psychology and sociology with the tools and knowledge of economists. Also, it aims to describe optimal behavior and predict actual one. Thus, one can develop models of economic behavior that are applicable to real situations. In this regard, the discipline is experiencing a golden age, as its applications are reaching public policy, marketing, and the work world. What topics does it address? Behavioral economics attempts to understand and explain motivations, decisions, and the influence of incentives. More specifically, key topics include behavioral analyses of incentives and…