The Case for Mindless Economics Form

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Adriene: Hi, this is Crash Course Economics, I’m Adriene Hill. Jacob: And I’m Jacob Clifford. So, when economists make their models, they generally assume that people are rational and predictable. Adriene: But when we look at actual human beings, it turns out that people are impulsive, shortsighted, and, a lot of times, just plain irrational. Look! Balloons! Jacob: Today we’re talking about Behavioral Economics and how people actually make decisions. [Theme Music] Behavioral economics is a subfield of economics that focuses on the psychological, social, and emotional factors that influence decision-making. That's not necessarily new. In fact, our old buddy Adam Smith, discussed it in The Theory of Moral Sentiments in 1759. But generations of economists chose to ignore many irrational elements of decision making since it makes it harder to predict human behavior. But in the last few decades, behavioral economics has made a comeback. Several Nobel Prizes have been awarded to resear