FOUR ARTICLES RELATED TO THE FIELD OF BEHAVIORAL ECONOMICS

This weeks Psychology Update provides three articles and a TedTalk Video regarding the field of Behavioral Economics.   According to Heshmat, 2017 (second article), “The field of behavioral economics blends insights of psychology and economics, and provides some valuable insights that individuals are not behaving in their own best interests. Behavioral economics provides a framework to understand when and how people make errors. Systematic errors or biases recur predictably in particular circumstances. Lessons from behavioral economics can be used to create environments that nudge people toward wiser decisions and healthier lives.”

The first article highlights the 2017 Nobel Prize in Economics to Richard H. Thaler for his contributions to the understanding of the interaction of human behavior in making economic decisions.  The second article explains in simple terms with lots of examples this fairly new applied field.  The third article examines individual health care choices from the applied perspective of Behavioral Economics.  The fourth is an approximately 20 minute Ted Talk video on the field.   For teaching purposes, this week’s Update can be used as part of understanding applied careers in Psychology as well as the application of Psychology to daily living.

ARTICLE #1

TITLE

Nobel in Economics Is Awarded to Richard Thaler

DESCRIPTION

This week Richard H. Thaler won the 2017 Nobel Prize in economics.  His work focuses on the role of human behavior in making economic decisions.  His work departs from accepted economics theories that posit decision making and behavior as rational.  “He showed that people depart from rationality in consistent ways, so their behavior can still be anticipated and modeled.”  The article has several examples of how Professor Thaler’s work demonstrates the importance of understanding actual (not hypothetical) human behavior is important in understanding economics.  His famous book Nudge is an important contribution to the field.   For teaching purposes, this topic of behavioral economics can be discussed in the sections related to careers in Psychology.

SOURCE

New York Times, October 9, 2017, Binyamin Appelbaum

LINK TO RESOURCE

https://www.nytimes.com/2017/10/09/business/nobel-economics-richard-thaler.html

(Tiny URL)  http://tinyurl.com/ydddnd9r

ARTICLE #2

TITLE

What Is Behavioral Economics?


SOURCE

Psychology Today, May 3, 2017, by Shahram Heshmat

LINK TO RESOURCE

https://www.psychologytoday.com/blog/science-choice/201705/what-is-behavioral-economics

(Tiny URL)  https://tinyurl.com/yd6tgy8m

ARTICLE #3

TITLE

How Behavioral Economics Can Produce Better Health Care

SOURCE

New York Times,  April 13, 2017, by Dhruv Khullar

LINK TO RESOURCE

(Tiny URL)  https://tinyurl.com/yc38fhkk

ARTICLE #4

TITLE

TED Talk Video:  What makes us feel good about our work?

SOURCE

TedTalks, October 2012, By Dan Ariely

LINK TO RESOURCE (TED Talk Video)

(TinyURL)  https://tinyurl.com/zsxyqrh

CLASS DISCUSSION QUESTIONS

•What is Behavioral Economics?

•How did the field evolve as an applied field?

•How does Behavioral Economics view rational decision making?  How does it contrast rational logical decision making to real life decision making processes?

•Using the article on healthcare and the Ted Talks video:  What kinds of errors in judgment do individuals make?  How is the process explained by Behavioral Economics?  What solutions are offered to get people to make rational logical decisions?