Author(s): Luccas Faria
Behavioral economics challenges the traditional assumption of rational decisionmaking in economic theory by incorporating insights from psychology into models of human behavior. This article explores how psychological factors, such as cognitive biases, heuristics, emotions, and social influences, shape economic decisions. By examining the role of these factors in consumer behavior, financial decisions, and public policy, behavioral economics provides a deeper understanding of why individuals often make irrational or suboptimal choices. The article also highlights how policymakers and businesses can use behavioral insights to design interventions that encourage better decision-making.