Behavioral Economics
The study of psychology as it relates to the economic decision-making processes of individuals and institutions.
30 topics found for
“financial decision-making”
System Two
A mode of thinking, derived from Dual Process Theory, that is slow, deliberate, and analytical, requiring more cognitive effort and conscious reasoning.
Behavioral Finance
The study of how psychological influences affect financial behaviors and decision-making.
Illusion of Validity
A cognitive bias where individuals overestimate the accuracy of their judgments, especially when they have a lot of information.
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.
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.
Expected Utility Theory
A theory in economics that models how rational individuals make decisions under risk by maximizing the expected utility of their choices.
Regressive Bias
A cognitive bias where individuals overestimate the likelihood of extreme events regressing to the mean.
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.