ABSTRACT
This chapter provides a brief introduction to behavioral economics. It discusses several key cognitive biases, and then provides a discussion of how behavior economics tools can be used to improve health decision-making. Behavioral economics draws on criticisms that have been made about the traditional economic model. In that model, individuals are assumed to be rational actors who are able to sift through information to make best choices in the marketplace that reflect their underlying preferences that is, they succeed in maximizing their utility. The first limitation is whether behavioral economics interventions have large enough impacts to really make a difference. Behavioral economics leverages insights from the fields of psychology in an attempt to better understand how people actually behave in the real world. Moreover, its insights can be used to develop policies to help improve people's behavior in many aspects of life, including health.
