While behavioral economics

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One example that comes to mind is when I invested in a crypto stock a while back. I only put in a small investment, but I didn't do it based on sound research and advice. I did it because I was just hoping it would explode out of no where and I would make a quick buck. So conventional economics would say that a person wouldn't invest any amount of money onto something that is likely not to make the money, but behavioral economics would account for a human being's ability to want to take irrational risks for a potentially reward. Another example could be purchasing an item that is more expensive but that is from a more well-known or trendy brand. For example, buying clothes from designers brands that are qualitatively the same but have a status to them. Conventional economics might say that that is not a decision a person would make, while behavioral economics would keep in the mind other factors of people such as their desire to be viewed as high-status.

Reference no: EM133652847

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