{"id":17774,"date":"2018-02-14T13:04:51","date_gmt":"2018-02-14T19:04:51","guid":{"rendered":"https:\/\/www.thechicagoschool.edu\/?post_type=insight_posts&p=17774"},"modified":"2020-08-17T14:08:27","modified_gmt":"2020-08-17T19:08:27","slug":"what-is-behavioral-economics","status":"publish","type":"post","link":"https:\/\/www.thechicagoschool.edu\/insight\/business\/what-is-behavioral-economics\/","title":{"rendered":"Q&A: Behavioral economics 101"},"content":{"rendered":"

Read the second post in this series, “5 everyday examples of behavioral economics<\/a>“, to learn about how behavioral economics is applied in our day-to-day lives.<\/em><\/p>\n

Read the third post in this series, “Must-see media list for behavioral economics<\/a>“, to discover a list of resources to help you learn about the field outside of the classroom.<\/em><\/p>\n

 <\/p>\n

We talked with the Associate Department Chair for Business Psychology and Program Chair for Behavioral Economics,\u00a0Elizabeth Schwab, Psy.D.<\/a>, to learn the basics. Dr. Schwab developed the\u00a0online masters in behavioral economics.<\/a><\/p>\n

{INSIGHT}: What is behavioral economics?<\/strong><\/p>\n

Elizabeth Schwab, Psy.D.:<\/strong>\u00a0Behavioral economics is the study of judgment and choice. It\u2019s about decision making. It was originally born out of this idea that economists\u2014who were trying to explain consumer behavior\u2014discovered anomalies in the models they were using. These economic models weren\u2019t able to explain all of human behavior. And that\u2019s where behavioral economics stepped in with the help of psychologists.<\/p>\n

{INSIGHT}: How does the behavioral economics program differ from an online economics degree?<\/strong><\/p>\n

Dr. Schwab:<\/strong>\u00a0Economics degrees really focus on traditional economic formulas and models for consumer behavior. Behavioral economics, especially\u00a0our program<\/a>\u00a0in particular, is grounded in psychology. We study the mechanisms behind what economists observe and predict.<\/p>\n

The other difference is economists assume perfect rationality, which means that they assume that people will always do what\u2019s in their best self-interest. Behavioral economics explicitly says no, people are actually\u00a0irrational<\/em>. That\u2019s why there are anomalies in economic models because those models assume rationality.<\/p>\n

{INSIGHT}:\u00a0<\/strong>Prospect theory<\/strong><\/a>, a behavioral model that shows how people decide between alternatives that involve risk and uncertainty, is a huge component of behavioral economics. But what exactly is \u201crisk\u201d?<\/strong><\/p>\n

Dr. Schwab:<\/strong>\u00a0Risk is about this idea of incomplete information. We don\u2019t know what\u2019s going to happen in a situation, we can\u2019t predict it, and so it becomes risky. When things are risky, we act in different ways.<\/p>\n

It\u2019s not difficult to get in your car and understand how to drive if you\u2019ve done it a hundred times. It becomes an automatic process for you. On the other hand, if it\u2019s your first time, you\u2019re 15, and you have your learner\u2019s permit, then you\u2019re thinking a little more slowly about everything. It\u2019s risky. We start to learn and adapt to situations and then make decisions differently depending on our emotions, familiarity, and comfortability.<\/p>\n

{INSIGHT}: What is your favorite thing about behavioral economics?<\/strong><\/p>\n

Dr. Schwab:\u00a0<\/strong>The relatability to real life\u2014the fact that so much of it feels intuitive. You read some of the findings, and about what people are studying and it\u2019s so easy to say, \u201cYes, I\u2019ve had an experience with that.\u201d<\/p>\n

I think there\u2019s a real movement in this field to make behavioral economics more applied, to make it friendlier for the layperson. How do I use this in my real life? How do we bring this into people\u2019s lives and help them be more aware of consumers (in terms of making better decisions and choices) and be more aware of their fallibility as humans?<\/p>\n

For more, read the second blog on real-life applications of behavioral economics “5 everyday examples of behavioral economics<\/a>.” Learn more about our online masters in behavioral economics here<\/a>\u00a0and must-see media options for behavioral economics here<\/a>.<\/em><\/p>\n

\n

Are you interested in learning more about The Chicago School of Professional Psychology? Fill out the form below to request more information, visit our\u00a0programs page<\/a>, or you can apply today through our\u00a0application portal.<\/a><\/p>\n

 <\/p>\n<\/section>","protected":false},"excerpt":{"rendered":"

The first in a three-part series on Behavioral Economics. We talked with the Associate Department Chair for Business Psychology and Program Chair for Behavioral Economics, Elizabeth Schwab, Psy.D., to learn more. <\/p>\n","protected":false},"author":7,"featured_media":17778,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[115],"tags":[],"coauthors":[1036],"class_list":["post-17774","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business","insight_authors-rebecca-koch"],"acf":[],"yoast_head":"\nWhat is Behavioral Economics? | The Chicago School<\/title>\n<meta name=\"description\" content=\"Elizabeth Schwab, Psy.D., gives an overview of behavioral economics and explains what makes the program different than a degree in economics.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.thechicagoschool.edu\/insight\/business\/what-is-behavioral-economics\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"What is Behavioral Economics? | The Chicago School\" \/>\n<meta property=\"og:description\" content=\"Elizabeth Schwab, Psy.D., gives an overview of behavioral economics and explains what makes the program different than a degree in economics.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.thechicagoschool.edu\/insight\/business\/what-is-behavioral-economics\/\" \/>\n<meta property=\"og:site_name\" content=\"Insight Digital Magazine\" \/>\n<meta property=\"article:published_time\" content=\"2018-02-14T19:04:51+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2020-08-17T19:08:27+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/www.thechicagoschool.edu\/insight\/wp-content\/uploads\/2018\/02\/BE_feature-1.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"366\" \/>\n\t<meta property=\"og:image:height\" content=\"200\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"Rebecca Koch\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Rebecca Koch\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"3 minutes\" \/>\n<!-- \/ Yoast SEO plugin. -->","yoast_head_json":{"title":"What is Behavioral Economics? | The Chicago School","description":"Elizabeth Schwab, Psy.D., gives an overview of behavioral economics and explains what makes the program different than a degree in economics.","robots":{"index":"index","follow":"follow","max-snippet":"max-snippet:-1","max-image-preview":"max-image-preview:large","max-video-preview":"max-video-preview:-1"},"canonical":"https:\/\/www.thechicagoschool.edu\/insight\/business\/what-is-behavioral-economics\/","og_locale":"en_US","og_type":"article","og_title":"What is Behavioral Economics? | The Chicago School","og_description":"Elizabeth Schwab, Psy.D., gives an overview of behavioral economics and explains what makes the program different than a degree in economics.","og_url":"https:\/\/www.thechicagoschool.edu\/insight\/business\/what-is-behavioral-economics\/","og_site_name":"Insight Digital Magazine","article_published_time":"2018-02-14T19:04:51+00:00","article_modified_time":"2020-08-17T19:08:27+00:00","og_image":[{"width":366,"height":200,"url":"https:\/\/www.thechicagoschool.edu\/insight\/wp-content\/uploads\/2018\/02\/BE_feature-1.jpg","type":"image\/jpeg"}],"author":"Rebecca Koch","twitter_card":"summary_large_image","twitter_misc":{"Written by":"Rebecca Koch","Est. reading time":"3 minutes"},"schema":{"@context":"https:\/\/schema.org","@graph":[{"@type":"Article","@id":"https:\/\/www.thechicagoschool.edu\/insight\/business\/what-is-behavioral-economics\/#article","isPartOf":{"@id":"https:\/\/www.thechicagoschool.edu\/insight\/business\/what-is-behavioral-economics\/"},"author":{"name":"Rebecca Koch","@id":"https:\/\/www.thechicagoschool.edu\/insight\/#\/schema\/person\/9e297160ed5ae3ad52c1e72fb1ca5fca"},"headline":"Q&A: Behavioral economics 101","datePublished":"2018-02-14T19:04:51+00:00","dateModified":"2020-08-17T19:08:27+00:00","mainEntityOfPage":{"@id":"https:\/\/www.thechicagoschool.edu\/insight\/business\/what-is-behavioral-economics\/"},"wordCount":602,"image":{"@id":"https:\/\/www.thechicagoschool.edu\/insight\/business\/what-is-behavioral-economics\/#primaryimage"},"thumbnailUrl":"https:\/\/www.thechicagoschool.edu\/insight\/wp-content\/uploads\/2018\/02\/BE_feature-1.jpg","articleSection":["Business Articles"],"inLanguage":"en-US"},{"@type":"WebPage","@id":"https:\/\/www.thechicagoschool.edu\/insight\/business\/what-is-behavioral-economics\/","url":"https:\/\/www.thechicagoschool.edu\/insight\/business\/what-is-behavioral-economics\/","name":"What is Behavioral Economics? | The Chicago School","isPartOf":{"@id":"https:\/\/www.thechicagoschool.edu\/insight\/#website"},"primaryImageOfPage":{"@id":"https:\/\/www.thechicagoschool.edu\/insight\/business\/what-is-behavioral-economics\/#primaryimage"},"image":{"@id":"https:\/\/www.thechicagoschool.edu\/insight\/business\/what-is-behavioral-economics\/#primaryimage"},"thumbnailUrl":"https:\/\/www.thechicagoschool.edu\/insight\/wp-content\/uploads\/2018\/02\/BE_feature-1.jpg","datePublished":"2018-02-14T19:04:51+00:00","dateModified":"2020-08-17T19:08:27+00:00","author":{"@id":"https:\/\/www.thechicagoschool.edu\/insight\/#\/schema\/person\/9e297160ed5ae3ad52c1e72fb1ca5fca"},"description":"Elizabeth Schwab, Psy.D., gives an overview of behavioral economics and explains what makes the program different than a degree in economics.","breadcrumb":{"@id":"https:\/\/www.thechicagoschool.edu\/insight\/business\/what-is-behavioral-economics\/#breadcrumb"},"inLanguage":"en-US","potentialAction":[{"@type":"ReadAction","target":["https:\/\/www.thechicagoschool.edu\/insight\/business\/what-is-behavioral-economics\/"]}]},{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/www.thechicagoschool.edu\/insight\/business\/what-is-behavioral-economics\/#primaryimage","url":"https:\/\/www.thechicagoschool.edu\/insight\/wp-content\/uploads\/2018\/02\/BE_feature-1.jpg","contentUrl":"https:\/\/www.thechicagoschool.edu\/insight\/wp-content\/uploads\/2018\/02\/BE_feature-1.jpg","width":366,"height":200,"caption":"what is behavioral economics"},{"@type":"BreadcrumbList","@id":"https:\/\/www.thechicagoschool.edu\/insight\/business\/what-is-behavioral-economics\/#breadcrumb","itemListElement":[{"@type":"ListItem","position":1,"name":"Home","item":"https:\/\/www.thechicagoschool.edu\/insight\/"},{"@type":"ListItem","position":2,"name":"Q&A: Behavioral economics 101"}]},{"@type":"WebSite","@id":"https:\/\/www.thechicagoschool.edu\/insight\/#website","url":"https:\/\/www.thechicagoschool.edu\/insight\/","name":"Insight Digital Magazine","description":"The Chicago School","potentialAction":[{"@type":"SearchAction","target":{"@type":"EntryPoint","urlTemplate":"https:\/\/www.thechicagoschool.edu\/insight\/?s={search_term_string}"},"query-input":{"@type":"PropertyValueSpecification","valueRequired":true,"valueName":"search_term_string"}}],"inLanguage":"en-US"},{"@type":"Person","@id":"https:\/\/www.thechicagoschool.edu\/insight\/#\/schema\/person\/9e297160ed5ae3ad52c1e72fb1ca5fca","name":"Rebecca Koch"}]}},"_links":{"self":[{"href":"https:\/\/www.thechicagoschool.edu\/insight\/wp-json\/wp\/v2\/posts\/17774","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.thechicagoschool.edu\/insight\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.thechicagoschool.edu\/insight\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.thechicagoschool.edu\/insight\/wp-json\/wp\/v2\/users\/7"}],"replies":[{"embeddable":true,"href":"https:\/\/www.thechicagoschool.edu\/insight\/wp-json\/wp\/v2\/comments?post=17774"}],"version-history":[{"count":9,"href":"https:\/\/www.thechicagoschool.edu\/insight\/wp-json\/wp\/v2\/posts\/17774\/revisions"}],"predecessor-version":[{"id":111005,"href":"https:\/\/www.thechicagoschool.edu\/insight\/wp-json\/wp\/v2\/posts\/17774\/revisions\/111005"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.thechicagoschool.edu\/insight\/wp-json\/wp\/v2\/media\/17778"}],"wp:attachment":[{"href":"https:\/\/www.thechicagoschool.edu\/insight\/wp-json\/wp\/v2\/media?parent=17774"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.thechicagoschool.edu\/insight\/wp-json\/wp\/v2\/categories?post=17774"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.thechicagoschool.edu\/insight\/wp-json\/wp\/v2\/tags?post=17774"},{"taxonomy":"author","embeddable":true,"href":"https:\/\/www.thechicagoschool.edu\/insight\/wp-json\/wp\/v2\/coauthors?post=17774"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}