In my studies about gamification I sure have noticed the very importance of learning behavioral economics. So I've started reading the basic books again and very carefully and this time from a practical point of view. This is an introductory presentation I've used to talk with some of my colleagues about the subject.

2. Economics
=
Optimization
+
Equilibrium

3. Core premise
of
Economic Theory
People
Choose
By
Optimizing!!!

4. • Fully Rational
• Master of Optimizing
• Spends time to decide correctly
• Selfish
• Very Aware of Future and forward planning
DO THEY EXIST IN OUR WORLD?
IntroducingEcons

5. Economics Theory
Considers every human being as an Econ!
and
With the full information needed to decide.
SOME MAJOR DIFFERENCES
Let’s see why we’re not

6. Problems with Optimizing
Hard to solve
for ordinary
people
01
Biased choices
(human biases,
cognitive, …)
02 03
Factors that
optimization
models leave
out

7. • We have cognitive biases.
• We use mental short cuts.
• Humans are emotional beings.
WE’RE NOT ROBOTS YET FOR SURE
Rationality

8. Seemswe’rebiased
mostofthetime!

9. • People have social preferences.
• There is social norm.
• Network effect.
• People learn socially.
• People are not always self-interested.
HUMANS ARE SOCIAL ANIMALS
SocialAnimals

10. • Is not the only motivation for people.
• Sunk cost affects us.
• Money is not fungible in real world.
THERE IS BUDGET PLANNING.
Money / Utility

11. • We decide quickly.
• Humans mostly use heuristic and rules of thumbs.
• Risk-averse for gains.
• Risk-seeking for losses.
• People use Mental-accounting.
CAN YOU SOLVE A PROBLEM WHERE AN ECONOMIST HAS SPENT YEARS TO SOLVE?
Thinkingfast and slow

12. • Personality
• Moods
• Emotions
CAN WE NEGLECT THESE DIFFERENCES?
Individualdifferences

13. Is not still well-designed for macro economics!
TAKE A LOOK AT “BEHAVIORAL GAME THEORY”
BehavioralEconomics
It’s very useful for policy makers!

14. And therecomes the Nudge

15. Simple Effective
Low
Cost
3 characteristics of Nudge

16. Thank you!
@ARSHourabi
Alireza.r.Shourabi@gmail.com