Behavioral Economics Glossary

A cognitive bias where initial exposure to a number or value influences subsequent judgments.

A field combining psychology and economics to study how cognitive biases affect economic decision-making.

The concept that rationality is limited by available information, cognitive capacity, and time.

The design of different ways in which choices can be presented to consumers.

A systematic pattern of deviation from norm or rationality in judgment.

The tendency to favor information that confirms pre-existing beliefs.

The tendency for people to accept the pre-set course of action.

Selling winners too early and holding losers too long in investment decisions.

Valuing owned items more highly than equivalent items not owned.

Reacting to choices differently depending on how they are presented.

The tendency to mimic the actions of a larger group.

A mental shortcut that allows quick decision-making but can lead to systematic errors.

The tendency to prefer smaller, immediate rewards over larger, delayed ones.

The tendency to prefer avoiding losses over acquiring equivalent gains.

Treating money differently depending on its source or intended use.

A subtle intervention designed to influence behavior while preserving freedom of choice.

Excessive confidence in one's own answers, abilities, or predictions.

Giving disproportionate weight to immediate payoffs over future ones.

A theory describing how people evaluate potential gains and losses relative to a reference point.

Judging probability based on similarity to a prototype rather than actual statistics.

The preference for maintaining the current state of affairs.

Continuing a course of action due to previously invested resources.

Fast, automatic, intuitive thinking that operates with little effort.

Slow, deliberate, analytical thinking that requires conscious effort.

A measure of satisfaction or value that a person derives from a good or service.