Social And Psychological Factors Influence Economic...

Behavioural economics, as it is possible to understand from the definition of the field itself, studies how social and psychological factors influence economic decisions. The main difference with the classical economic approach is that, while economists use a normative approach in describing extit{how decisions should be made} to optimise a reward function, by assuming that subjects are rational decision-makers citep{von2007theory}, behavioural economics describes extit{how decisions are actually made} by using experiments that emulate real-life decision problems citep{kahneman2000choices, todd2003bounding}. This field of research has lead to the development of heuristics that subjects use in different choice context citep{holyoak2005cambridge}. However, these explanations only postulate disparate heuristics for different choice settings and cannot describe the time course of a decision. In an attempt to overcome such limitations, recently, sequential sampling models of choice w idely studied in the perceptual decision making field, have been used to explain the time course of preference formation in value-based choice in which the subject is no more integrating evidence over time, but value instead, as for example in making a decision between different sources of food. An example of a value-based decision making choice is: shall I have an apple or a pear? From a phenomenological approach this might seem a trivial question, however investigating how such a decision isShow MoreRelatedAlcohol And Drug Addiction Among People Of Different Ages861 Words   |  4 Pagesas many other addictions, these addictions have psychological, biological, and sociological roots to it. 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