Behavioural Economics

Overview

Behavioural economics seeks to study the actual behaviour of real agents in the economy, rather than the idealized version presented by classical economics. Often, this study is framed as examining the departures from the traditional theories.

Topics

• Decisions: the fundamental issue of micro-economics is the question of choice and decision. How to individuals decide what to do, what to buy, what to consume. Likewise, how does the firm decide what products to produce and the price to sell them at. Behavioural decision making reveals the ways in which choices made by real agents differ from the idealized version of choice present by ration decision making.
• Wealth Decisions and Asset Pricing: is a specialized area of the theory of choice that focuses on the issues of risk versus reward.