Richard ThalerRichard H. Thaler (; born September 12, 1945) is an American economist and the Charles R. Walgreen Distinguished Service Professor of Behavioral Science and Economics at the University of Chicago Booth School of Business. In 2015, Thaler was president of the American Economic Association. Thaler is a theorist in behavioral economics. He has collaborated with Daniel Kahneman, Amos Tversky, and others in further defining that field.
Loss aversionIn cognitive science and behavioral economics, loss aversion is a cognitive bias in which the same situation is perceived as worse if it is framed as a loss, rather than a gain. It should not be confused with risk aversion, which describes the rational behavior of valuing an uncertain outcome at less than its expected value.
Daniel KahnemanDaniel Kahneman (; Hebrew: דניאל כהנמן; March 5, 1934 – March 27, 2024) was an Israeli-American psychologist best known for his work on the psychology of judgment and decision-making as well as behavioral economics, for which he was awarded the 2002 Nobel Memorial Prize in Economic Sciences together with Vernon L. Smith. Kahneman's published empirical findings challenge the assumption of human rationality prevailing in modern economic theory.Bounded rationalityBounded rationality is the idea that rationality is limited when individuals make decisions, and under these limitations, rational individuals will select a decision that is satisfactory rather than optimal. Limitations include the difficulty of the problem requiring a decision, the cognitive capability of the mind, and the time available to make the decision.
Herbert A. SimonHerbert Alexander Simon (June 15, 1916 – February 9, 2001) was an American scholar whose work influenced the fields of computer science, economics, and cognitive psychology. His primary research interest was decision-making within organizations and he is best known for the theories of "bounded rationality" and "satisficing". He and Allen Newell received the ACM Turing Award in 1975, and he received the Nobel Memorial Prize in Economic Sciences in 1978.
RationalityQuality of being agreeable to reasonNot to be confused with Rationale or Rationalism.Rationality is the quality of being guided by or based on reason. In this regard, a person acts rationally if they have a good reason for what they do, or a belief is rational if it is based on strong evidence.
Decision-makingProcess to choose a course of actionIn psychology, decision-making (also spelled decision making and decisionmaking) is regarded as the cognitive process resulting in the selection of a belief or a course of action among several possible alternative options. It could be either rational or irrational. The decision-making process is a reasoning process based on assumptions of values, preferences and beliefs of the decision-maker.
PsychologyPsychology is the scientific study of the mind and behavior. Its subject matter includes the behavior of humans and nonhumans, both conscious and unconscious phenomena, and mental processes such as thoughts, feelings, and motives. Psychology is an academic discipline of broad scope, crossing the boundaries between the natural and social sciences. A professional practitioner or researcher involved in the discipline is called a psychologist.
MicroeconomicsMicroeconomics is a branch of economics that studies the behavior of individuals and firms in making decisions regarding the allocation of scarce resources and the interactions among these individuals and firms. Microeconomics focuses on the study of individual markets, sectors, or industries as opposed to the economy as a whole, which is studied in macroeconomics.
Adam SmithAdam Smith (baptised 16 June [O.S. 5 June] 1723 – 17 July 1790) was a Scottish economist and philosopher who was a pioneer in the field of political economy and key figure during the Scottish Enlightenment. Seen by many as the "father of economics", or the "father of capitalism", he is primarily known for two classic works: The Theory of Moral Sentiments (1759) and An Inquiry into the Nature and Causes of the Wealth of Nations (1776).
NeuroscienceScientific study of the nervous systemDrawing by Santiago Ramón y Cajal (1899) of neurons in the pigeon cerebellumNeuroscience is the scientific study of the nervous system (the brain, spinal cord, and peripheral nervous system), its functions, and its disorders.Agent (economics)In economics, an agent is an actor (more specifically, a decision maker) in a model of some aspect of the economy. Typically, every agent makes decisions by solving a well- or ill-defined optimization or choice problem. For example, buyers (consumers) and sellers (producers) are two common types of agents in partial equilibrium models of a single market.*As an Amazon Associate I earn from qualifying purchases.