{"product_id":"behavioral-economics-for-dummies-isbn-9781118085035","title":"Behavioral Economics For Dummies","description":"\u003cb\u003eA guide to the study of how and why you \u003ci\u003ereally\u003c\/i\u003e make financial decisions\u003c\/b\u003e  \u003cp\u003eWhile classical economics is based on the notion that people act with rational self-interest, many key money decisions—like splurging on an expensive watch—can seem far from rational. The field of behavioral economics sheds light on the many subtle and not-so-subtle factors that contribute to our financial and purchasing choices. And in \u003ci\u003eBehavioral Economics For Dummies\u003c\/i\u003e, readers will learn how social and psychological factors, such as instinctual behavior patterns, social pressure, and mental framing, can dramatically affect our day-to-day decision-making and financial choices.\u003c\/p\u003e \u003cp\u003eBased on psychology and rooted in real-world examples, \u003ci\u003eBehavioral Economics For Dummies\u003c\/i\u003e offers the sort of insights designed to help investors avoid impulsive mistakes, companies understand the mechanisms behind individual choices, and governments and nonprofits make public decisions.\u003c\/p\u003e \u003cul\u003e \u003cli\u003eA friendly introduction to the study of how and why people really make financial decisions\u003c\/li\u003e \u003cli\u003eThe author is a professor of behavioral and institutional economics at Victoria University\u003c\/li\u003e \u003c\/ul\u003e \u003cp\u003eAn essential component to improving your financial decision-making (and even to understanding current events), \u003ci\u003eBehavioral Economics For Dummies\u003c\/i\u003e is important for just about anyone who has a bank account and is interested in why—and when—they spend money.\u003c\/p\u003e \u003cp\u003e\u003cb\u003eIntroduction 1\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eAbout This Book 1\u003c\/p\u003e \u003cp\u003eConventions Used in This Book 2\u003c\/p\u003e \u003cp\u003eWhat You’re Not to Read 2\u003c\/p\u003e \u003cp\u003eFoolish Assumptions 3\u003c\/p\u003e \u003cp\u003eHow This Book isOrganized 3\u003c\/p\u003e \u003cp\u003ePart I: Introducing Behavioral Economics: The Science of Making Real-World Choices 4\u003c\/p\u003e \u003cp\u003ePart II: Understanding Choice 4\u003c\/p\u003e \u003cp\u003ePart III: Growing the Economic Pie: The Economic Importance of Ethics, Well-Being, and Culture 4\u003c\/p\u003e \u003cp\u003ePart IV: When Bubbles and Busts and Inefficiencies Are Possible: Some Behavioral Insights into the Strange World of Economic Reality 5\u003c\/p\u003e \u003cp\u003ePart V: The Part of Tens 5\u003c\/p\u003e \u003cp\u003eIcons Used in This Book 6\u003c\/p\u003e \u003cp\u003eWhere to Go from Here 6\u003c\/p\u003e \u003cp\u003e\u003cb\u003ePart I: Introducing Behavioral Economics: The Science of Making Real-World Choices 7\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 1: Decoding Behavioral Economics 9\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eMaking Wise Assumptions 9\u003c\/p\u003e \u003cp\u003eWhy reality matters 10\u003c\/p\u003e \u003cp\u003eWhy incentives matter — even in behavioral economics 10\u003c\/p\u003e \u003cp\u003eMaking Sense of Choice 11\u003c\/p\u003e \u003cp\u003eMaximizing versus satisficing 11\u003c\/p\u003e \u003cp\u003eThe effect of emotions 12\u003c\/p\u003e \u003cp\u003eThe avoidance of loss 12\u003c\/p\u003e \u003cp\u003eHow options are framed 12\u003c\/p\u003e \u003cp\u003ePaternalism versus free choice 13\u003c\/p\u003e \u003cp\u003eThe role of social context in decision making 14\u003c\/p\u003e \u003cp\u003eRelative positioning 14\u003c\/p\u003e \u003cp\u003eGrowing the Economic Pie 15\u003c\/p\u003e \u003cp\u003eDeciphering Bubbles and Busts 15\u003c\/p\u003e \u003cp\u003eInefficient markets and investment behavior 16\u003c\/p\u003e \u003cp\u003eEmotions, intuition, animal spirits, and business cycles 16\u003c\/p\u003e \u003cp\u003eUnderstanding Happiness: Money Isn’t Everything 17\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 2: Getting Real about Assumptions 19\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eDefining an Economic Model 20\u003c\/p\u003e \u003cp\u003eExplaining economic phenomena 21\u003c\/p\u003e \u003cp\u003eMaking simplifying assumptions 21\u003c\/p\u003e \u003cp\u003eDiscovering the irrelevance of facts 22\u003c\/p\u003e \u003cp\u003eUnderstanding the role of math in model building 23\u003c\/p\u003e \u003cp\u003eConsidering cause and effect 26\u003c\/p\u003e \u003cp\u003eWatching out for spurious correlations 26\u003c\/p\u003e \u003cp\u003eContemplating Conventional Economic Assumptions and Real-World Alternatives 27\u003c\/p\u003e \u003cp\u003eConventional assumption #1: People’s preferences are stable and consistent 27\u003c\/p\u003e \u003cp\u003eConventional assumption #2: People are solitary decision makers 28\u003c\/p\u003e \u003cp\u003eConventional assumption #3: How people form preferences doesn’t matter 28\u003c\/p\u003e \u003cp\u003eConventional assumption #4: People have the same preferences 29\u003c\/p\u003e \u003cp\u003eConventional assumption #5: People are all maximizers 30\u003c\/p\u003e \u003cp\u003eConventional assumption #6: People have perfect knowledge 32\u003c\/p\u003e \u003cp\u003eConventional assumption #7: People have unbounded computational capabilities 33\u003c\/p\u003e \u003cp\u003eConventional assumption #8: People have willpower 34\u003c\/p\u003e \u003cp\u003eConventional assumption #9: People are capable of acting upon their preferences 35\u003c\/p\u003e \u003cp\u003eUnderstanding Rational Economic Behavior 36\u003c\/p\u003e \u003cp\u003eYou can do no wrong: Errors and biases in decision making 37\u003c\/p\u003e \u003cp\u003eSelfishness and the smart society 38\u003c\/p\u003e \u003cp\u003eGetting to Know the Behavioral Economics Actor 39\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 3: Neuroeconomics: Exploring the Brain for Economic Analysis 41\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eWhere Neuroeconomics Fits in the Behavioral Economics\u003c\/p\u003e \u003cp\u003ePerspective 43\u003c\/p\u003e \u003cp\u003eThe Brain and Economics 45\u003c\/p\u003e \u003cp\u003eThe evolution of the human brain 45\u003c\/p\u003e \u003cp\u003eThe division of labor in the human brain 48\u003c\/p\u003e \u003cp\u003eThe Emotional Brain 49\u003c\/p\u003e \u003cp\u003eDescartes’ error: The somatic marker hypothesis 49\u003c\/p\u003e \u003cp\u003ePhineas Gage and the social and emotional side of rational decision making 50\u003c\/p\u003e \u003cp\u003eHow Emotions Affect Decision Making 53\u003c\/p\u003e \u003cp\u003eFear and decision making 53\u003c\/p\u003e \u003cp\u003eHappiness and decision making 54\u003c\/p\u003e \u003cp\u003eThe Limits of the Human Brain and Homo Economicus 54\u003c\/p\u003e \u003cp\u003eThe brain isnot a calculating machine 55\u003c\/p\u003e \u003cp\u003eThe brain isa scarce resource 55\u003c\/p\u003e \u003cp\u003eWhat Brain Sciences Confirm for the Behavioral Economist 57\u003c\/p\u003e \u003cp\u003ePeople prefer the present to the future 57\u003c\/p\u003e \u003cp\u003ePeople’s aversion to loss affects their decision making 58\u003c\/p\u003e \u003cp\u003eWhat people feel isn’t always what they experience 58\u003c\/p\u003e \u003cp\u003ePeople care about keeping up with — and beating —the Joneses 60\u003c\/p\u003e \u003cp\u003ePeople’s brains evolve over their lifetimes 61\u003c\/p\u003e \u003cp\u003ePeople value fairness 62\u003c\/p\u003e \u003cp\u003ePeople like to trust and be trusted 63\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 4: Why Incentives and Markets Matter, but Money Isn’t Everything 65\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eThe Role of Economic Incentives for Economic Behavior 66\u003c\/p\u003e \u003cp\u003eWhy money isall that matters in conventional economics 67\u003c\/p\u003e \u003cp\u003eOpportunity costs for Homo economicus 69\u003c\/p\u003e \u003cp\u003eDecision Making and Opportunity Costs 71\u003c\/p\u003e \u003cp\u003eUsing up your mind: Bounded rationality 71\u003c\/p\u003e \u003cp\u003eConsidering costs other than money: Psychological costs 72\u003c\/p\u003e \u003cp\u003eReducing opportunity costs in the real world: Satisficing behavior 73\u003c\/p\u003e \u003cp\u003eWeighing the opportunity cost of altruism 75\u003c\/p\u003e \u003cp\u003eSupply and Demand and Behavioral Economics 75\u003c\/p\u003e \u003cp\u003eIntroducing the bandwagon effect 76\u003c\/p\u003e \u003cp\u003eInvestigating the snob effect 77\u003c\/p\u003e \u003cp\u003eInterjecting morals and ethics 78\u003c\/p\u003e \u003cp\u003eIntroducing sociology to supply and demand 79\u003c\/p\u003e \u003cp\u003eEconomic Psychology: How Thoughts and Feelings Impact Decisions 84\u003c\/p\u003e \u003cp\u003eLoss aversion: How framing, ownership, and control affect economic behavior 85\u003c\/p\u003e \u003cp\u003eHow the fear of uncertainty influences decisions 85\u003c\/p\u003e \u003cp\u003eThe warm glow: Why people sacrifice money for fairness or justice 87\u003c\/p\u003e \u003cp\u003eForfeiting money for status 88\u003c\/p\u003e \u003cp\u003e\u003cb\u003ePart II: Understanding Choice 89\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 5: Exploring the Limits to Free Choice 91\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eFree Choice in Economic Decision Making 92\u003c\/p\u003e \u003cp\u003eWhat conventional economics says 92\u003c\/p\u003e \u003cp\u003eWhat behavioral economics says 93\u003c\/p\u003e \u003cp\u003eRevealed Preferences: When Choices Reveal Your Inner Self 94\u003c\/p\u003e \u003cp\u003eThe narrative about preferences 95\u003c\/p\u003e \u003cp\u003eFalse preferences versus true preferences 96\u003c\/p\u003e \u003cp\u003eThe limits of revealed preferences and free choice 98\u003c\/p\u003e \u003cp\u003eThe Illusion of Free Choice 99\u003c\/p\u003e \u003cp\u003eAdvertising and preference distortions 99\u003c\/p\u003e \u003cp\u003eSelf-control and free choice 101\u003c\/p\u003e \u003cp\u003eDefaults as a determinant of choice 102\u003c\/p\u003e \u003cp\u003eHerding, the bandwagon effect, and free choice: Are followers irrational? 103\u003c\/p\u003e \u003cp\u003eConstraining Choice versus Freedom of Choice 104\u003c\/p\u003e \u003cp\u003eInformation 104\u003c\/p\u003e \u003cp\u003eEducation 105\u003c\/p\u003e \u003cp\u003eConsumer rights 105\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 6: Quick and Simple Heuristics and Real-World Decision Making 107\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eA Bird’s-Eye View of Smart Decision Making in Conventional Economics 108\u003c\/p\u003e \u003cp\u003eDecision-making norms in conventional economics: The human calculating machine 109\u003c\/p\u003e \u003cp\u003eThe optimizing decision-making machine in conventional economics 110\u003c\/p\u003e \u003cp\u003eCore conventional benchmarks for rational choice: To dream an impossible dream 111\u003c\/p\u003e \u003cp\u003eThe limits of conventional rationality 112\u003c\/p\u003e \u003cp\u003eRethinking Bounded Rationality and the Limits of the Mind 113\u003c\/p\u003e \u003cp\u003eBounded rationality and satisficing: Rationality within reason 114\u003c\/p\u003e \u003cp\u003eThe two blades of the decision-making scissors: Ecological rationality 114\u003c\/p\u003e \u003cp\u003eProspect Theory: Describing Average Decision-Making Behavior 116\u003c\/p\u003e \u003cp\u003eIntroducing prospect theory: Real-world decision making under uncertainty 117\u003c\/p\u003e \u003cp\u003eThinking about prospect theory and conventional norms 118\u003c\/p\u003e \u003cp\u003eExploring emotions as a hot bed of irrationality 118\u003c\/p\u003e \u003cp\u003eThe fundamentals of prospect theory: Understanding the value function 119\u003c\/p\u003e \u003cp\u003eUnveiling Some Implications of Loss Aversion 122\u003c\/p\u003e \u003cp\u003eLoss aversion and the certainty effect 122\u003c\/p\u003e \u003cp\u003eRisk seeking in losses 123\u003c\/p\u003e \u003cp\u003eThe endowment effect: Explaining attachment to possessions 124\u003c\/p\u003e \u003cp\u003eUncovering Errors and Biases in Decision Making 125\u003c\/p\u003e \u003cp\u003eOverconfidence 125\u003c\/p\u003e \u003cp\u003eHerd behavior 125\u003c\/p\u003e \u003cp\u003eConfirmation bias 126\u003c\/p\u003e \u003cp\u003eAnchoring 126\u003c\/p\u003e \u003cp\u003eGeneralizing 127\u003c\/p\u003e \u003cp\u003eLess isBest in Decision-Making: Fast and Frugal Heuristics 127\u003c\/p\u003e \u003cp\u003eExploring the superiority of heuristics 128\u003c\/p\u003e \u003cp\u003eUnderstanding human rationality: New benchmarks built on human capabilities 130\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 7: How the Framing of Choices Affects Decision Making 131\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eThe Framing Effect 131\u003c\/p\u003e \u003cp\u003eFraming and the economic schools of thought 132\u003c\/p\u003e \u003cp\u003eThe effect of framing on preferences and choices 133\u003c\/p\u003e \u003cp\u003eAppreciating the objective unimportance of frames: The errors and biases approach 133\u003c\/p\u003e \u003cp\u003eUnderstanding frames as heuristics 134\u003c\/p\u003e \u003cp\u003eFraming in Pictures: The Possibility of Cognitive Illusions 134\u003c\/p\u003e \u003cp\u003eFraming the Mona Lisa 135\u003c\/p\u003e \u003cp\u003eDistorting the line illusion 135\u003c\/p\u003e \u003cp\u003eFraming faces 136\u003c\/p\u003e \u003cp\u003eFraming automobiles: Surface beauty versus substance 137\u003c\/p\u003e \u003cp\u003eThe letter illusion 138\u003c\/p\u003e \u003cp\u003eWe’re All Framed: Framing and Decision Making 139\u003c\/p\u003e \u003cp\u003eFraming and loss aversion: The classic Asian disease experiment 140\u003c\/p\u003e \u003cp\u003eWhen money isn’t everything 142\u003c\/p\u003e \u003cp\u003eSaving a penny to lose a bundle: Framing prices through relative positioning 143\u003c\/p\u003e \u003cp\u003eFrames as Defaults: How Anchors Sway the Course of Decision Making 144\u003c\/p\u003e \u003cp\u003eChanging default options and choices 144\u003c\/p\u003e \u003cp\u003eRevisiting choice architecture 146\u003c\/p\u003e \u003cp\u003eFraming isimportant, but so are income and prices 147\u003c\/p\u003e \u003cp\u003eThe Inescapable Frame and Rational Decision Making 148\u003c\/p\u003e \u003cp\u003eUnderstanding frames as an information-generating machine 148\u003c\/p\u003e \u003cp\u003eRepairing frames and rational decision making 148\u003c\/p\u003e \u003cp\u003eIntroducing product labels into the framing arsenal 149\u003c\/p\u003e \u003cp\u003eMarket Failure and the Framing Effect 149\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 8: How Norms, Peers, History, and Culture Influence Choice 153\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eMaking Decisions in a Bubble, the Conventional Economics Way 154\u003c\/p\u003e \u003cp\u003eMaking decisions as if other people don’t matter 155\u003c\/p\u003e \u003cp\u003eMaking decisions as if history doesn’t matter 155\u003c\/p\u003e \u003cp\u003eMaking decisions as if society doesn’t matter 157\u003c\/p\u003e \u003cp\u003eIntroducing Social Norms to Decision Making 157\u003c\/p\u003e \u003cp\u003eLooking at some norms 158\u003c\/p\u003e \u003cp\u003eIdentifying how trust impacts economic development 161\u003c\/p\u003e \u003cp\u003eSeeing how discriminating norms can lead to a slow economy 162\u003c\/p\u003e \u003cp\u003eStudying the role of education in the formation of norms and the shaping of preferences 163\u003c\/p\u003e \u003cp\u003eThe carrot and the stick: Exploring the enforcement of social norms 163\u003c\/p\u003e \u003cp\u003ePeer Pressure: Seeing How Peers Affect Decision Making 164\u003c\/p\u003e \u003cp\u003eHow History and Culture Affect Choice 165\u003c\/p\u003e \u003cp\u003eRooting choice in history 165\u003c\/p\u003e \u003cp\u003eCulture club: How culture affects the formation of preferences and choices 166\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 9: Why Gender, Children, and Age Matter for Economic Analysis 167\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eHow Gender Affects Choice 167\u003c\/p\u003e \u003cp\u003eNot tonight, honey: Conventional choice theory 168\u003c\/p\u003e \u003cp\u003eHousehold bargaining power and women’s rights 169\u003c\/p\u003e \u003cp\u003eUnderstanding household choices when women have a voice 171\u003c\/p\u003e \u003cp\u003eExploring population growth when women’s preferences count 172\u003c\/p\u003e \u003cp\u003eUnderstanding why women go on welfare even if they want to work 174\u003c\/p\u003e \u003cp\u003eIdentifying why women are more risk averse than men 175\u003c\/p\u003e \u003cp\u003eExploring women’s altruistic preferences 176\u003c\/p\u003e \u003cp\u003eExamining labor market discrimination 177\u003c\/p\u003e \u003cp\u003eThe Role of Children in Economic Decision Making 179\u003c\/p\u003e \u003cp\u003eNews Flash! Preferences Change with Age 179\u003c\/p\u003e \u003cp\u003e\u003cb\u003ePart III: Growing the Economic Pie: The Economic Importance of Ethics, Well-Being, and Culture 181\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 10: Why Smart People Pay Taxes, Recycle, and Even Break the Law 183\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eWhy Most People Pay Taxes: The Big Stick versus the Warm Glows 183\u003c\/p\u003e \u003cp\u003eHow the big stick induces tax payments 184\u003c\/p\u003e \u003cp\u003eThe niceness effect 185\u003c\/p\u003e \u003cp\u003eSocial norms and taxes 186\u003c\/p\u003e \u003cp\u003eA sense of fairness and tax compliance 186\u003c\/p\u003e \u003cp\u003eDifferent Perspectives on Reducing Pollution 187\u003c\/p\u003e \u003cp\u003eExploring the economics of pollution control 187\u003c\/p\u003e \u003cp\u003eThinking about the green corporation 188\u003c\/p\u003e \u003cp\u003eUnderstanding the links between green consumption and green production 189\u003c\/p\u003e \u003cp\u003eStudying social norms and the greening of the world 189\u003c\/p\u003e \u003cp\u003eUnderstanding the mix of economic and non-economic variables in determining green production 190\u003c\/p\u003e \u003cp\u003eCrime and Punishment 190\u003c\/p\u003e \u003cp\u003eThe calculating criminal 191\u003c\/p\u003e \u003cp\u003eAddiction and criminal behavior 193\u003c\/p\u003e \u003cp\u003eThe role of identity and social networks in determining criminal behavior 193\u003c\/p\u003e \u003cp\u003eWhy most people don’t commit crimes even when crime pays 194\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 11: Labor Supply in the Real World 197\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eAn Introduction to Labor Supply 197\u003c\/p\u003e \u003cp\u003eDecoding the reality of labor supply 197\u003c\/p\u003e \u003cp\u003eMapping out changes to labor supply 198\u003c\/p\u003e \u003cp\u003eUncovering what people do when they aren’t working 201\u003c\/p\u003e \u003cp\u003eLabor Supply When People Prefer Leisure: The Conventional Economics Perspective 202\u003c\/p\u003e \u003cp\u003eThe income-leisure trade-off: Bribing people to work 203\u003c\/p\u003e \u003cp\u003eWhy economics predicts that more income reduces labor supply: Work as an inferior good 206\u003c\/p\u003e \u003cp\u003eHow to increase the labor supply when people dislike work: Using the big stick 207\u003c\/p\u003e \u003cp\u003eHow Economic Necessity, Norms, and Love of Work Determine Labor Supply 207\u003c\/p\u003e \u003cp\u003eHow target income affects labor supply 208\u003c\/p\u003e \u003cp\u003eWhy increasing income doesn’t reduce labor supply 209\u003c\/p\u003e \u003cp\u003eLabor supply when market employment isa superior good 210\u003c\/p\u003e \u003cp\u003eSocial welfare programs and labor supply 210\u003c\/p\u003e \u003cp\u003eNorms, anchors, default retirement age, and labor supply 213\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 12: The Black Box of the Firm: Human Relationships and Productivity 215\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eSurvival of the Fittest, the Firm, and Contemporary Economic Theory 216\u003c\/p\u003e \u003cp\u003eDoing the best we can: From slave to free labor to the big boss 216\u003c\/p\u003e \u003cp\u003eDetermining industrial relations through market forces 217\u003c\/p\u003e \u003cp\u003eMaximizing profits and minimizing costs in the calculating firm 218\u003c\/p\u003e \u003cp\u003eUnderstanding why the behavioral firm wins out 221\u003c\/p\u003e \u003cp\u003eWhen People Don’t Behave According to Conventional Economics: X-Inefficiency 221\u003c\/p\u003e \u003cp\u003eTypes of x-inefficiency 221\u003c\/p\u003e \u003cp\u003eWhen product markets aren’t competitive enough 222\u003c\/p\u003e \u003cp\u003eIncreasing inefficiency, managerial slack, and the art of lobbying 223\u003c\/p\u003e \u003cp\u003ePreferences, managerial slack, and x-inefficiency 223\u003c\/p\u003e \u003cp\u003eHow low wages produce x-inefficiency and high wages contribute to x-efficiency 224\u003c\/p\u003e \u003cp\u003eEfficiency wages: Connecting wages, effort, and productivity 226\u003c\/p\u003e \u003cp\u003eExploring fairness and gift exchange inside the firm 227\u003c\/p\u003e \u003cp\u003eUnderstanding the relationship between conventional, x-efficiency, and efficiency wage theories 227\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 13: The Good Economy: How Ethical Behavior Can Grow the Economy 229\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eEthical Behavior: An Introduction 229\u003c\/p\u003e \u003cp\u003eThe Conventional Perspective on Ethical Behavior and the Economy 231\u003c\/p\u003e \u003cp\u003eThe Good Company 233\u003c\/p\u003e \u003cp\u003eThe Compatibility between Ethics and Profits 236\u003c\/p\u003e \u003cp\u003eExamining x-efficiency and the socially responsible firm 236\u003c\/p\u003e \u003cp\u003eHow ethical consumers sustain and grow ethical production 239\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 14: Why Institutions Matter 243\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eWhat Behavioral Economics Has to Say about Institutions 244\u003c\/p\u003e \u003cp\u003eThe decision-making context 245\u003c\/p\u003e \u003cp\u003eThe theory of the firm 245\u003c\/p\u003e \u003cp\u003eThe New Institutional Economics 246\u003c\/p\u003e \u003cp\u003eInstitutions and Wealth Creation 250\u003c\/p\u003e \u003cp\u003eGovernance 251\u003c\/p\u003e \u003cp\u003eCulture 255\u003c\/p\u003e \u003cp\u003e\u003cb\u003ePart IV: When Bubbles and Busts and Inefficiencies Are Possible: Some Behavioral Insights into the Strange World of Economic Reality 257\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 15: Deciphering Behavioral Finance 259\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eWhat Behavioral Finance is259\u003c\/p\u003e \u003cp\u003eThe Efficient Asset Market Models and Their Limits 260\u003c\/p\u003e \u003cp\u003eThe efficient market hypothesis 261\u003c\/p\u003e \u003cp\u003eThe random walk hypothesis 262\u003c\/p\u003e \u003cp\u003eIrrational Exuberance: Smells Like Animal Spirit 264\u003c\/p\u003e \u003cp\u003eBubbles and Busts: A Preface to Inefficient Markets 266\u003c\/p\u003e \u003cp\u003eThe Dutch tulip bulb bubble 266\u003c\/p\u003e \u003cp\u003eContemporary bubbles: Evidence of inefficient markets 268\u003c\/p\u003e \u003cp\u003eThe causes of financial bubbles 271\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 16: Looking into Recessions and Depressions 275\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eIntroducing Psychology in Business Cycle Narratives 276\u003c\/p\u003e \u003cp\u003eGrasping the meaning of macroeconomics, recessions, and depressions 276\u003c\/p\u003e \u003cp\u003eUnderstanding animal spirits 279\u003c\/p\u003e \u003cp\u003eDeconstructing business cycles: The tango between psychology and “real” factors 284\u003c\/p\u003e \u003cp\u003eEconomic Psychology and Government Policy 285\u003c\/p\u003e \u003cp\u003eHow Fairness, Reciprocity, and Punishment Influence Wages, Effort, and the Business Cycle 286\u003c\/p\u003e \u003cp\u003eHow efficiency wages cause sticky wages and involuntary unemployment 287\u003c\/p\u003e \u003cp\u003eWhy businesspeople don’t like to cut wages over the business cycle 287\u003c\/p\u003e \u003cp\u003eInsights on money illusion: Tricking workers into cutting their wages 288\u003c\/p\u003e \u003cp\u003eWhy high wages don’t necessarily cause higher unemployment 289\u003c\/p\u003e \u003cp\u003eHow unemployment undermines confidence and destroys productivity 289\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 17: The Art and Science of Happiness: Can You Be Happy without More Money? 291\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eHappiness and Conventional Economics 291\u003c\/p\u003e \u003cp\u003eHow happiness ismeasured 292\u003c\/p\u003e \u003cp\u003eThe art of being happy 292\u003c\/p\u003e \u003cp\u003eWhy conventional economics assumes that money makes you happy 294\u003c\/p\u003e \u003cp\u003eDiminishing returns for income and wealth 295\u003c\/p\u003e \u003cp\u003eWhat increasing per-capita income ignores 295\u003c\/p\u003e \u003cp\u003eHappiness and Behavioral Economics 296\u003c\/p\u003e \u003cp\u003eWhat makes us happy: The individual versus the expert 297\u003c\/p\u003e \u003cp\u003eWhy money alone can’t make you happy (at least if you’re well off) 298\u003c\/p\u003e \u003cp\u003eThe new empirics of the happiness debate 301\u003c\/p\u003e \u003cp\u003eWhat money can’t buy (at least not easily) 303\u003c\/p\u003e \u003cp\u003eHow Government Policy Affects Happiness 306\u003c\/p\u003e \u003cp\u003e\u003cb\u003ePart V: The Part of Tens 309\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 18: Ten (Or So) Key Public Policy Implications of Behavioral Economics 311\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eConsumer Rights and Protection and the Framing of Information 312\u003c\/p\u003e \u003cp\u003eProduct Labeling and Consumer Choice 312\u003c\/p\u003e \u003cp\u003eFinancial Markets and Information Deceit 313\u003c\/p\u003e \u003cp\u003eSaving for the Future 313\u003c\/p\u003e \u003cp\u003eOrgan Donations 314\u003c\/p\u003e \u003cp\u003eWeakness of Will and Self-Control 315\u003c\/p\u003e \u003cp\u003eLabor Market Regulation and Economic Efficiency 316\u003c\/p\u003e \u003cp\u003eBig Brother and Behavioral Economics: Does Government Know Best? 316\u003c\/p\u003e \u003cp\u003eCrime, Punishment, and Identity 317\u003c\/p\u003e \u003cp\u003ePopulation Growth and the Empowerment of Women 318\u003c\/p\u003e \u003cp\u003eTax Compliance: The Carrot isas Important as the Stick 319\u003c\/p\u003e \u003cp\u003eTrust and Economic Efficiency in an Imperfect World 319\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 19: Ten (Or So) Experiments in Behavioral Economics 321\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eThe Ultimatum Game: Fairness and Punishment 321\u003c\/p\u003e \u003cp\u003eThe Dictator Game: Being Fair Because It’s the Right Thing to Do 323\u003c\/p\u003e \u003cp\u003eFair Wage Experiments: Adventures into Labor Market Dynamics 324\u003c\/p\u003e \u003cp\u003ePublic Goods Games: Sacrificing for the Public Good 325\u003c\/p\u003e \u003cp\u003eThe Dark Side of Humanity: It Isn’t All about Lovingkindness 327\u003c\/p\u003e \u003cp\u003eThe Endowment Effect: How Ownership Affects Behavior 327\u003c\/p\u003e \u003cp\u003eMarket Games: Markets Work Even When They’re “Irrational” 329\u003c\/p\u003e \u003cp\u003eBubble Experiments: How Smart People Produce Economic Bubbles 330\u003c\/p\u003e \u003cp\u003eExperiments on Bounded Rationality 331\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 20: Ten Decision-Making Lessons from Behavioral Economics 333\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eBe Wary of Overconfidence 333\u003c\/p\u003e \u003cp\u003eYou Can’t Believe Everything You Read 334\u003c\/p\u003e \u003cp\u003eAvoid Situations That Require More Self-Control Than You Can Muster 335\u003c\/p\u003e \u003cp\u003eDon’t Blindly Follow the Herd 336\u003c\/p\u003e \u003cp\u003eYou Can’t Trust Everyone 336\u003c\/p\u003e \u003cp\u003eInvest Simply 337\u003c\/p\u003e \u003cp\u003ePay Attention to Sample Size 337\u003c\/p\u003e \u003cp\u003eRead the Fine Print 338\u003c\/p\u003e \u003cp\u003eBeing Nice Pays 338\u003c\/p\u003e \u003cp\u003eEducate Yourself 339\u003c\/p\u003e \u003cp\u003eIndex 341\u003c\/p\u003e \u003cb\u003eMorris Altman\u003c\/b\u003e, PhD, is a professor of behavioral economics at Victoria University of Wellington in New Zealand and a professor of economics at the University of Saskatchewan in Canada. He is on the board of the Society for the Advancement of Behavioral Economics and is a former president of that organization. He also edited the \u003ci\u003eHandbook of Contemporary Behavioral Economics\u003c\/i\u003e.  \u003cb\u003eThe guide to understanding why people really make economic and financial decisions\u003c\/b\u003e  \u003cp\u003eThe field of behavioral economics sheds light on the many subtle and not-so-subtle factors that contribute to financial and purchasing choices. This friendly guide explores how socialand psychological factors, such as instinctual behavior patterns, social pressure, and mental framing, can dramatically affect our day-to-day decision making and financial choices. Based on psychology and sociology and rooted in real-world examples, \u003ci\u003eBehavioral Economics For Dummies\u003c\/i\u003e offers the sort of insights designed to help investors avoid impulsive mistakes, companies understand the mechanisms behind individual choices, and governments and nonprofits make public decisions.\u003c\/p\u003e \u003cul\u003e \u003cli\u003e \u003cp\u003e\u003cb\u003eMake realistic assumptions for economic analysis\u003c\/b\u003e — investigate the assumptions conventional economics makes, and discover how behavioral economists introduce social, psychological, and cultural considerations\u003c\/p\u003e \u003c\/li\u003e \u003cli\u003e \u003cp\u003e\u003cb\u003eExplore the relationship between the brain and economics\u003c\/b\u003e — understand how human behavior and surroundings affect economic phenomena\u003c\/p\u003e \u003c\/li\u003e \u003cli\u003e \u003cp\u003e\u003cb\u003eExamine the role of free choice in economic decision making\u003c\/b\u003e — review the conditions that are necessary in order for people to make choices that reflect their true preferences, given the constraints they face\u003c\/p\u003e \u003c\/li\u003e \u003cli\u003e \u003cp\u003e\u003cb\u003eGet happy\u003c\/b\u003e — recognize that factors other than wealth and money are critically important to a person's happiness, as defined by behavioral economics\u003c\/p\u003e \u003c\/li\u003e \u003c\/ul\u003e \u003cp\u003e\u003cb\u003eLearn to:\u003c\/b\u003e\u003c\/p\u003e \u003cul\u003e \u003cli\u003e \u003cp\u003eUnderstand how social and psychological factors affect our economic and financial decisions\u003c\/p\u003e \u003c\/li\u003e \u003cli\u003e \u003cp\u003eGrasp how governments and experts influence our choices\u003c\/p\u003e \u003c\/li\u003e \u003cli\u003e \u003cp\u003eAvoid making impulsive and uninformed decisions\u003c\/p\u003e \u003c\/li\u003e \u003cli\u003e \u003cp\u003eAppreciate why ethics are important to our choices\u003c\/p\u003e \u003c\/li\u003e \u003c\/ul\u003e \u003cp\u003e\u003cb\u003eOpen the book and find:\u003c\/b\u003e\u003c\/p\u003e \u003cul\u003e \u003cli\u003e \u003cp\u003eThe many subtle factors that contribute to our financial and purchasing choices\u003c\/p\u003e \u003c\/li\u003e \u003cli\u003e \u003cp\u003eWhy people really make financial decisions\u003c\/p\u003e \u003c\/li\u003e \u003cli\u003e \u003cp\u003eReal-world examples of how behavioral economics affects our lives\u003c\/p\u003e \u003c\/li\u003e \u003cli\u003e \u003cp\u003eWhat social and psychological factors affect our decision making\u003c\/p\u003e \u003c\/li\u003e \u003cli\u003e \u003cp\u003eHow to use behavioral economics to be happier\u003c\/p\u003e \u003c\/li\u003e \u003cli\u003e \u003cp\u003eWhy government policies affect the economy\u003c\/p\u003e \u003c\/li\u003e \u003cli\u003e \u003cp\u003eHelpful consumer tips\u003c\/p\u003e \u003c\/li\u003e \u003c\/ul\u003e \u003cp\u003eGo to \u003cb\u003eDummies.com\u003c\/b\u003e for videos, step-by-step examples, how-to articles, or to shop!\u003c\/p\u003e","brand":"For Dummies","offers":[{"title":"Default Title","offer_id":47988800225509,"sku":"NP9781118085035","price":21.99,"currency_code":"USD","in_stock":false}],"thumbnail_url":"\/\/cdn.shopify.com\/s\/files\/1\/1842\/7735\/files\/9781118085035.jpg?v=1761781637","url":"https:\/\/k12savings.com\/es\/products\/behavioral-economics-for-dummies-isbn-9781118085035","provider":"K12savings","version":"1.0","type":"link"}