Predicting the unpredictable: 6 key behavioural economics concepts

26 Jun 2023

Our actions can impact the economy in a multitude of ways every day, often without us even realising. In your own life, it could be something as small as buying a cup of coffee each morning or as big as acquiring a home mortgage. 

Drawing on psychological, sociological and political theories, behavioural economics is a field of study that seeks to create realistic predictions of the economy by looking beyond what is considered rational human behaviour. Instead, the discipline examines the often-conflicting motivations behind decision making to forecast or influence the actions of individuals and institutions.

Dr Vera te Velde, a Senior Lecturer from The University of Queensland (UQ)’s School of Economics, believes understanding how humans really make decisions is useful for employers, organisations and governance. 

“By paying attention to the individual decision-making process, we are slowly building a much richer picture of human economic behaviour,” she says.

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