Microeconomics › Section F · Consumer choices › Topic F.3
Behavioral economics
The textbook consumer compares every option and never procrastinates. The humans who actually buy things scroll past their best choice and keep gym memberships they never use. Behavioural economics bridges the two - with findings that predict the mistakes, and a design toolkit that steers people without forcing them.
In this topic
- When the model meets the humans
- Bounded rationality and satisficing
- Losses loom larger than gains
- The endowment effect
- Framing and anchoring
- Present bias
- Mental accounting
- Nudges: choice architecture
- Worked example: automatic enrolment
- Worked example: reading a sale sign rationally
- Common mistakes to avoid
- Key takeaways
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