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Behavioral economics is the scientific study of decision making, and of the related topics of valuation, exchange, and interpersonal interactions. Drawing on methods from psychology, sociology, neurology, and economics, this remarkable discipline illuminates one of the most deeply fundamental activities of human existence: the decision process.
From the moment we wake in the morning, we are confronted with decisions—from what to buy at the supermarket or how to spend the weekend to which career path to pursue, which car to buy, or how to invest our money. Most of the time we make good decisions. But some of the time we don’t. Whether our decisions are successful or less than optimal influences how our lives unfold.
Paradoxically, although we are constantly making decisions, we rarely reflect on the actual process of decision making itself. Making decisions can seem largely intuitive—and intuitions don’t always lead to happy outcomes. But what if you could be fully aware of the process? What might life be like if you could put your hands on the gears of decision making—the specific patterns of perception and cognition that shape your choices—and turn the process to your advantage?
Behavioral economics offers just that possibility. With an incisive focus on human behavior, behavioral economics uncovers what is usually hidden from view in our decision-making process, exploring the key motivators for our decisions, such as probability, risk, reward, and the passage of time. In doing so, it sheds fascinating light on our psychology and on how our brains process information and shape our perceptions as we make decisions.
Most important, by applying its unique approach to many kinds of real-life choices, behavioral economics offers powerful, practical tools for making better and more satisfying decisions.
As a case in point, behavioral economics identifies many human biases or behavioral tendencies that influence our decisions, sometimes outside of our awareness. Behavioral economists show, for example, that our brains predispose us to see things that are familiar as being better or more valuable—making name-brand merchandise or stocks of familiar companies seem desirable. This innate human tendency can lead to bad economic decisions.
The good news, as behavioral economics clearly shows, is that our customary processes and patterns of decision making are not inevitable. By becoming aware of them and watching how they operate in our daily actions, we can open new possibilities for our own behavior and for decision making that can meaningfully improve our quality of life.
In Behavioral Economics: When Psychology and Economics Collide, award-winning Professor Scott Huettel of Duke University leads you in a penetrating look at the processes of decision making that are an integral part of human life. In 24 revealing lectures, you’ll study how behavioral economists look at decision making and explore a set of core principles that offer profound insight into how we gather information and integrate multiple factors to reach decisions. Using real-life examples and case studies, each topic builds to concrete recommendations so that you can understand the patterns of decision making, the purposes they serve, and how to use your knowledge to make more effective and beneficial decisions.
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