Behavioral Economics Concepts

Front

Behavioral Economics

Back

The subfield of economics that applies psychological insights into human behavior and to explain economic decision making.

Front

Cognitive Bias

Back

A subconscious error in thinking that leads to irrational decision making.

Front

Confirmation Bias

Back

The tendency to search for information that supports our preconceptions and to ignore or distort contradictory evidence.

Front

Endowment Effect

Back

The tendency to put more value on things you already own.

Front

FOMO (Fear of Missing Out)

Back

The tendency to feel anxiety/fear that an exciting or interesting event may currently be happening elsewhere, often aroused by posts seen on a social media website.

Front

Herd Mentality

Back

The tendency to conform to the behaviors and beliefs of the people around you.

Front

Loss Aversion

Back

The tendency to regard losses as considerably more important than gains of comparable magnitude.

Front

Overconfidence Bias

Back

The tendency people have to be more confident in their own abilities.

Front

Overestimation

Back

When a person believes they are better at something than they actually are.

Front

Overnight Test

Back

A strategy used to combat loss aversion by imagining that overnight something you own has been replaced with cash, then determining whether you would prefer to keep the cash or buy the item back.