ECO200Y1 Lecture Notes - Lecture 23: Homo Economicus, Behavioral Economics, Daniel Kahneman
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A relatively new discipline, resulting from the incorporation, by economics, of theoretical developments and empirical discoveries. Its researchers start from a critique of the traditional economic approach, supported by the conception of "homo economicus" Who is described as a rational, thoughtful decision maker. Centered on personal interest and with unlimited capacity to process information. The traditional economy considers that the market or the evolution process itself is capable of solving decision errors arising from a limited rationality. Behavioral economics suggests that the reality is different: Have difficulty balancing short and long term interests and are strongly influenced by emotional factors and the behavior of others. Behavioral economists seek to understand and model individual and market decisions from this alternative view of people. Psychological, emotional, conscious and unconscious influences that affect human beings in their choices are tentatively incorporated into the models. Behavioral economics aims to understand and model the decisions of agents in a more realistic way.