ABSTRACT
All economic behavior is human behavior. Later in the twentieth century, the approach that came to dominate economics was known as the neoclassical model. This approach took a narrower view of human motivations. The basic neoclassical or traditional model builds a simplified story about economic life by assuming that there are only two main types of economic actors and by making simplifying assumptions about how these two types of actors behave and interact. The neoclassical view of human behavior is being increasingly replaced by an alternative commonly called behavioral economics. Behavioral economics gathers insights from numerous disciplines including economics, psychology, sociology, anthropology, neuroscience, and biology to determine and predict how people actually make economic decisions. Perhaps the most famous behavioral economist is not even an economist by training. A common area of seemingly irrational economic behavior is personal finance.
