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Behavioral Economics For Dummies®

Book Description

A guide to the study of how and why you really make financial decisions

While classical economics is based on the notion that people act with rational self-interest, many key money decisions—like splurging on an expensive watch—can seem far from rational. The field of behavioral economics sheds light on the many subtle and not-so-subtle factors that contribute to our financial and purchasing choices. And in Behavioral Economics For Dummies, readers will learn how social and psychological factors, such as instinctual behavior patterns, social pressure, and mental framing, can dramatically affect our day-to-day decision-making and financial choices.

Based on psychology and rooted in real-world examples, Behavioral Economics For Dummies offers the sort of insights designed to help investors avoid impulsive mistakes, companies understand the mechanisms behind individual choices, and governments and nonprofits make public decisions.

  • A friendly introduction to the study of how and why people really make financial decisions

  • The author is a professor of behavioral and institutional economics at Victoria University

An essential component to improving your financial decision-making (and even to understanding current events), Behavioral Economics For Dummies is important for just about anyone who has a bank account and is interested in why—and when—they spend money.

Table of Contents

  1. Cover
  2. Title Page
  3. Table of Contents
  4. Introduction
  5. Part I: Introducing Behavioral Economics: The Science of Making Real-World Choices
    1. Chapter 1: Decoding Behavioral Economics
    2. Chapter 2: Getting Real about Assumptions
    3. Chapter 3: Neuroeconomics: Exploring the Brain for Economic Analysis
    4. Chapter 4: Why Incentives and Markets Matter, but Money Isn't Everything
  6. Part II: Understanding Choice
    1. Chapter 5: Exploring the Limits to Free Choice
    2. Chapter 6: Quick and Simple Heuristics and Real-World Decision Making
    3. Chapter 7: How the Framing of Choices Affects Decision Making
    4. Chapter 8: How Norms, Peers, History, and Culture Influence Choice
    5. Chapter 9: Why Gender, Children, and Age Matter for Economic Analysis
  7. Part III: Growing the Economic Pie: The Economic Importance of Ethics, Well-Being, and Culture
    1. Chapter 10: Why Smart People Pay Taxes, Recycle, and Even Break the Law
    2. Chapter 11: Labor Supply in the Real World
    3. Chapter 12: The Black Box of the Firm: Human Relationships and Productivity
    4. Chapter 13: The Good Economy: How Ethical Behavior Can Grow the Economy
    5. Chapter 14: Why Institutions Matter
  8. Part IV: When Bubbles and Busts and Inefficiencies Are Possible: Some Behavioral Insights into the Strange World of Economic Reality
    1. Chapter 15: Deciphering Behavioral Finance
    2. Chapter 16: Looking into Recessions and Depressions
    3. Chapter 17: The Art and Science of Happiness: Can You Be Happy without More Money?
  9. Part V: The Part of Tens
    1. Chapter 18: Ten (Or So) Key Public Policy Implications of Behavioral Economics
    2. Chapter 19: Ten (Or So) Experiments in Behavioral Economics
    3. Chapter 20: Ten Decision-Making Lessons from Behavioral Economics