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Behavioral Economics
A field of economics that studies how psychological, social, cognitive, and emotional factors affect the economic decisions of individuals and institutions.
System 1
Refers to our mental system primarily responsible for quick, instinctual, and often subconscious decisions and judgments, contrasting with deliberate and analytical thinking processes.
System 2
refers to a theory of decision-making proposed by Daniel Kahneman that emphasizes slow, deliberate, and analytical reasoning.
Availability Heuristic
A mental shortcut that relies on immediate examples that come to a person's mind, affecting the perception of the frequency or likelihood of events.
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