Book contents
- Making Decisions: Analytics, Cognition, and Application
- Making Decisions: Analytics, Cognition, and Application
- Copyright page
- Dedication
- Contents
- Figures
- Tables
- Preface
- Acknowledgments
- Copyright Acknowledgements
- Part I Analytics: Probability, Evaluation, Decision Trees, and Strategies for Decision Making
- Introduction to Part II: Cognitive Processes of Decision Making
- 5 Heuristics: Assumptions and Quick Rules of Thumb We All Use, But Maybe Shouldn’t
- 6 Prospect Theory: Psychological Aspects beyond Expected Value
- 7 Two Systems: A Descriptive Model That Explains How People Make Decisions
- 8 Decisions Are Made Based on Our Memories, But How Reliable Are Our Memories?
- 9 Psychology + Economics = Behavioral Economics = Ways to (Gently) Influence Decisions
- Part III Applications, Examples, and Selected Topics
- References
- Index
- References
9 - Psychology + Economics = Behavioral Economics = Ways to (Gently) Influence Decisions
from Introduction to Part II: Cognitive Processes of Decision Making
Published online by Cambridge University Press: 23 October 2025
Book contents
- Making Decisions: Analytics, Cognition, and Application
- Making Decisions: Analytics, Cognition, and Application
- Copyright page
- Dedication
- Contents
- Figures
- Tables
- Preface
- Acknowledgments
- Copyright Acknowledgements
- Part I Analytics: Probability, Evaluation, Decision Trees, and Strategies for Decision Making
- Introduction to Part II: Cognitive Processes of Decision Making
- 5 Heuristics: Assumptions and Quick Rules of Thumb We All Use, But Maybe Shouldn’t
- 6 Prospect Theory: Psychological Aspects beyond Expected Value
- 7 Two Systems: A Descriptive Model That Explains How People Make Decisions
- 8 Decisions Are Made Based on Our Memories, But How Reliable Are Our Memories?
- 9 Psychology + Economics = Behavioral Economics = Ways to (Gently) Influence Decisions
- Part III Applications, Examples, and Selected Topics
- References
- Index
- References
Summary
During the closing years of the twentieth century, research psychologists and economists came to recognize the synergies and overlaps between the two disciplines. The field of behavioral economics provides descriptive explanations of why people behave as they do, and also tools and techniques that are now widely adopted for influencing the decisions individuals make. In their 2009 book Nudge: Improving decisions about health, wealth, and happiness, Richard Thaler and Cass Sunstein proposed libertarian paternalism, whereby institutions could gently guide people in their decision making. They introduced the concept of choice architecture whereby the decisions people face could be designed and structured so individuals retained control but can easily make decisions that benefit themselves and society. Examples include selection of healthful foods, encouraging organ donation, early planning for retirement savings, and others.
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- Making Decisions: Analytics, Cognition, and Application , pp. 110 - 124Publisher: Cambridge University PressPrint publication year: 2025
References
Recommended Readings
Thaler, R. (1980). Toward a positive theory of consumer choice. Journal of Economic Behavior & Organization, 1(1), 39–60. https://doi.org/10.1016/0167-2681(80)90051-7.CrossRefGoogle Scholar
Thaler, R. H. (2015). Misbehaving: The making of behavioral economics. W. W. Norton & Company.Google Scholar
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