Behavioral Economics - Cognitive Biases

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Behavioral Economics - Cognitive Biases

Udemy business lists "behavioral economics" as the number four skill on its list of the 100 fastest-growing skills for 2024 (Feb 23, 2024). Udemy claims that "Employees’ skills are the single most important factor for determining whether a business can deliver on its goals and beat the competition. Gartner estimates that the number of skills needed for a single job is increasing by 10% year-over-year, and more than 30% of the skills required three years ago will soon be irrelevant."

In practice, that means you need to understand the cognitive biases we have and how they can sometimes interfere with effective decision making. Simple changes in language such as reversing a question's phrasing can lead to predictable, though irrational, answers; you should recognize those tricks when they're being applied to you. 

Behavioral economics is the study of the psychological, cognitive, emotional, cultural and social factors involved in the decisions of individuals or institutions, and how these decisions deviate from those implied by classical economic theory.[1][2]

Behavioral economics is primarily concerned with the bounds of rationality of economic agents. Behavioral models typically integrate insights from psychology, neuroscience and microeconomic theory.[3][4] The study of behavioral economics includes how market decisions are made and the mechanisms that drive public opinion.

Behavioral economics began as a distinct field of study in the 1970s and '80s, but can be traced back to 18th-century economists, such as Adam Smith, who deliberated how the economic behavior of individuals could be influenced by their desires.[5]

The status of behavioral economics as a subfield of economics is a fairly recent development; the breakthroughs that laid the foundation for it were published through the last three decades of the 20th century.[6][7] Behavioral economics is still growing as a field, being used increasingly in research and in teaching.[8]

Source: https://en.wikipedia.org/wiki/Behavioral_economics, accessed Feb 23, 2024

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