Behavioral Economics
The study of psychology as it relates to the economic decision-making processes of individuals and institutions. Essential for understanding and influencing user decision-making and behavior in economic contexts.
198 topics found for:
“decision-making behavior”
Behavioral Strategy
The use of behavioral science insights to inform and guide strategic decision-making in organizations. Crucial for developing strategies that effectively influence behavior and drive business success.
Take the Best Heuristic
A decision-making rule where individuals choose the option with the highest perceived value based on the first good reason that comes to mind, ignoring other information. Crucial for understanding and designing for quick decision-making processes.
Groupthink
A psychological phenomenon where the desire for harmony and conformity in a group results in irrational or dysfunctional decision-making. Crucial for recognizing and mitigating the risks of poor decision-making in teams.
Satisficing
A decision-making strategy that involves choosing an option that meets the minimum requirements rather than seeking the optimal solution, balancing effort and outcome. Important for designing user experiences that accommodate decision-making under constraints.
MINDSPACE
Messenger, Incentives, Norms, Defaults, Salience, Priming, Affect, Commitment, and Ego (MINDSPACE) is a framework used to understand and influence behavior. Crucial for designing interventions that effectively influence user behavior.
Affect Heuristic
A mental shortcut where current emotions influence decisions, often bypassing logic and reasoning. Important for understanding how emotions impact user decisions, aiding in more effective design and marketing.
System One
A mode of thinking, derived from Dual Process Theory, that is fast, automatic, and intuitive, often relying on heuristics and immediate impressions. Important for understanding how users make quick decisions and respond to design elements instinctively, aiding in the creation of intuitive and user-friendly interfaces.
Opportunity Cost Neglect
A cognitive bias where individuals overlook or underestimate the cost of opportunities they forego when making decisions. Crucial for understanding user decision-making behavior and designing systems that highlight opportunity costs.
Decision Architecture
The design of environments in which people make decisions, influencing their choices and behaviors. Important for creating user experiences that guide decision-making processes effectively.
Prospect Theory
A behavioral economic theory that describes how people choose between probabilistic alternatives that involve risk, where the probabilities of outcomes are known. Crucial for understanding decision-making under risk and designing systems that align with user behavior.
Behavioral Finance
The study of how psychological influences affect financial behaviors and decision-making. Essential for understanding and influencing financial decision-making and behavior.
Bounded Rationality
A concept that humans make decisions within the limits of their knowledge, cognitive capacity, and available time, leading to satisficing rather than optimal solutions. Crucial for designing systems and processes that account for human cognitive limitations and decision-making processes.
Behavioral Game Theory
The study of strategic decision making, incorporating psychological insights into traditional game theory models. Useful for understanding complex user interactions and designing systems that account for strategic behavior.
Hyperbolic Discounting
A cognitive bias where people disproportionately prefer smaller, immediate rewards over larger, later rewards. Important for understanding and designing around user decision-making and reward structures.
Priming
A psychological effect where exposure to one stimulus influences the response to a subsequent stimulus, without conscious guidance or intention. Crucial for designing experiences that subtly guide user behavior and decision-making.
Shared Information Bias
A cognitive bias where group members tend to discuss information that everyone already knows rather than sharing unique information, leading to less effective decision-making. Important for understanding group dynamics and improving the quality of collaborative decision-making among designers.
Overconfidence Effect
A cognitive bias where a person's subjective confidence in their judgments is greater than their objective accuracy. Crucial for understanding user decision-making and designing systems that account for overconfidence.
Reference Dependence
A cognitive bias where individuals evaluate outcomes relative to a reference point rather than on an absolute scale. Essential for understanding decision-making and consumer behavior.
Decoy Effect
A cognitive bias where consumers change their preference between two options when presented with a third, less attractive option. Useful for designers to create choice architectures that effectively influence user decisions.
Preference Reversal
A phenomenon where individuals' preferences between options change when the options are presented in different ways or contexts. Important for understanding and designing around inconsistencies in user choices.
Projection Bias
The tendency to overestimate how much our future preferences and behaviors will align with our current preferences and behaviors. Important for understanding user behavior and designing experiences that account for changes over time.
Identity Priming
The process of triggering particular aspects of a person's identity to influence their behavior or decisions. Important for designing personalized and effective user experiences.
Probability Matching
A decision-making strategy where individuals allocate resources proportionally to the probability of an outcome occurring, rather than optimizing the most likely outcome. Important for understanding decision-making behaviors and designing systems that guide better resource allocation.
Allais Paradox
A decision-making paradox that shows people's preferences can violate the expected utility theory, highlighting irrational behavior. Important for understanding inconsistencies in user decision-making and designing better user experiences.
Dual Self Model
A behavioral economics model that explains decision-making as a conflict between a present-oriented "doer" and a future-oriented "planner". Useful for understanding user decision-making and designing interventions that balance short-term and long-term goals.
Choice Architecture
The practice of organizing the context in which people make decisions to influence the outcomes, often used to nudge users towards certain behaviors. Crucial for designing user experiences that guide decision-making and improve outcomes.
Myopic Loss Aversion
A cognitive bias where individuals tend to avoid risks when they perceive potential losses more acutely than potential gains. Important for understanding decision-making behavior in users and designing systems that mitigate risk aversion.
Homo Economicus
A theoretical concept in economics that portrays humans as rational and self-interested agents who aim to maximize their utility. Important for understanding economic decision-making and designing systems that align with rational behavior.
Heuristic
A rule-of-thumb or shortcut that simplifies decision-making and problem-solving processes. Essential for designing user-friendly interfaces that facilitate quick and efficient decision-making.
Expectancy Theory
A motivational theory suggesting that individuals are motivated to act based on the expected outcomes of their actions and the attractiveness of those outcomes. Important for understanding motivation and behavior, distinct from decision-making under uncertainty.
Decision Theory
The study of how individuals make choices among alternatives and the principles that guide these choices. Important for designing decision-making processes and interfaces that help users make informed choices.
Regret Aversion
A tendency to avoid making decisions that might lead to regret, influencing risk-taking and decision-making behaviors. Crucial for understanding decision-making processes and designing systems that minimize regret.
Groupshift
A phenomenon where group members make decisions that are more extreme than the initial inclination of its members due to group discussions and interactions. Crucial for understanding and mitigating the risks of extreme decision-making in group settings.
Intertemporal Choice
The study of how people make choices about what and how much to do at various points in time, often involving trade-offs between costs and benefits occurring at different times. Crucial for designing systems that account for delayed gratification and long-term planning.
Information Bias
A cognitive bias where people seek out more information than is needed to make a decision, often leading to analysis paralysis. Crucial for designing decision-making processes that avoid information overload for users.
Omission Bias
A cognitive bias where people judge harmful actions as worse, or less moral, than equally harmful omissions (inactions). Important for understanding user decision-making and designing systems that mitigate this bias.
Dual Process Theory
A framework suggesting there are two systems of thinking: System 1 (fast, automatic) and System 2 (slow, deliberate), influencing decision-making and behavior. Crucial for understanding how users process information and make decisions.
Escalation of Commitment
A cognitive bias where individuals or organizations continue to invest in a failing project or decision due to the amount of resources already committed. Important for designers to recognize and mitigate their own risks of continuing unsuccessful initiatives.
Expected Utility Theory
A theory in economics that models how rational individuals make decisions under risk by maximizing the expected utility of their choices. Essential for understanding decision-making under risk.
Hot Hand Fallacy
The mistaken belief that a person who has experienced success in a random event has a higher probability of further success in additional attempts. Crucial for understanding and designing around user decision-making biases.
Risk-as-Feelings Theory
A theory that emphasizes the role of emotions in risk perception and decision-making, where feelings about risk often diverge from cognitive assessments. Important for designing systems that account for emotional responses to risk and improve decision-making.
Relativity
A principle often used in behavioral economics that suggests people evaluate options based on relative comparisons rather than absolute values. Important for understanding decision-making and designing choices that highlight beneficial comparisons.
Proportionality Bias
The tendency to believe that large or significant events must have large or significant causes. Important for understanding cognitive biases in decision-making and designing systems that present accurate causal relationships.
Informational Influence
The change in opinions or behavior that occurs when individuals conform to the information provided by others. Important for understanding social dynamics and designing systems that leverage social proof and peer influence.
Numerosity Bias
The tendency to perceive a greater quantity as a better value, regardless of the actual utility. Important for understanding consumer behavior and designing effective marketing strategies.
Bye-Now Effect
The tendency for people to defer purchasing decisions to a later time, often leading to procrastination. Important for understanding consumer behavior and optimizing sales strategies.
Pseudocertainty Effect
A cognitive bias where people perceive an outcome as certain while it is actually uncertain, based on how information is presented. Crucial for understanding and mitigating biased user decision-making.
Pseudo Set Framing
The cognitive bias where people treat a set of items as more significant when they are perceived as a cohesive group. Important for understanding user perception and decision-making.
Zero-Risk Bias
A cognitive bias where people prefer the option that seems to eliminate risk entirely, even if another option offers a greater overall benefit. Important for understanding decision-making and designing risk communication for users.
Recency Effect
A cognitive bias where individuals better remember the most recent information they have encountered, influencing decision-making and memory recall. Important for designing user experiences that leverage or mitigate the impact of recent information.
Optimism Bias
A cognitive bias that causes people to believe they are less likely to experience negative events and more likely to experience positive events than others. Crucial for understanding user risk perception and designing systems that account for unrealistic optimism.
Present Bias
A cognitive bias where individuals give stronger weight to payoffs that are closer to the present time compared to those in the future. Important for understanding user time-related decision-making and designing systems that encourage long-term thinking.
Regressive Bias
A cognitive bias where individuals overestimate the likelihood of extreme events regressing to the mean. Crucial for understanding decision-making and judgment under uncertainty.
Nudging
The act of designing and implementing subtle interventions to influence behavior in a predictable way. Crucial for guiding user behavior effectively without limiting freedom of choice.
Discounted Utility
A concept in behavioral economics that describes how future benefits are perceived as less valuable than immediate ones. Important for understanding user preferences and designing experiences that account for time-based value perceptions.
Loss Aversion
A cognitive bias where the pain of losing is psychologically more powerful than the pleasure of gaining. Important for designing user experiences that account for and mitigate loss aversion.
Scarcity Principle
The economic theory that suggests limited availability of a resource increases its value, influencing decision-making and behavior. Important for creating urgency and increasing perceived value in marketing.
Diversification Bias
A cognitive bias where people prefer a greater variety of options when making simultaneous choices compared to sequential choices. Important for designers to consider user preferences for variety when designing choice architectures and product offerings.
Pessimism Bias
A cognitive bias that causes people to overestimate the likelihood of negative outcomes. Important for understanding user risk perception and designing systems that address irrational pessimism.