Congratulations! You just bought a new home and itâs perfect for your family â just the right size, condition, location and neighborhood to meet your needs. Your new home is part of a homeownersâ association (HOA), so the landscaping and common areas always look beautiful and well-maintained.
Economics is a social science that assesses the relationship between the consumption and production of goods and services in an environment of finite resources. A focus of the subject is how economic agents behave or interact both individually (microeconomics) and in aggregate (macroeconomics).
All of economics is meant to be about peopleâs behavior. So, what is behavioral economics, and how does it differ from the rest of economics? Economics traditionally conceptualizes a world populated by calculating, unemotional maximizers that have been dubbed Homo economicus. The standard economic framework ignores or rules out virtually all the behavior studied by cognitive and social psychologists.