Think Like An Economist

S E48: Behavioral Economics - We're only human!

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Sep 21, 2021
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ANECDOTE

Sharks vs. Mosquitoes

  • People overestimate the danger of sharks, while mosquitoes are deadlier.
  • Many avoid swimming due to shark fear, but neglect mosquito repellent.
INSIGHT

Behavioral Economics

  • This misassessment of risk leads to misguided decisions.
  • Behavioral economics studies how our psychology causes these mistakes.
INSIGHT

Thinking Fast vs. Slow

  • We rely on snap judgments instead of thorough analysis.
  • Psychologists differentiate between intuitive, fast thinking and deliberate, slow thinking.
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