ABSTRACT
Behavioural economics (BE), a division of economics that applies behavioural science to economics, can be used to more accurately analyse and predict (deviated) human behavioural patterns. Unlike traditional economics models, the premise of BE builds upon common cognitive biases, irrationalities, and deviations of normal behavioural patterns that often drive people to make economic decisions that are not in their best interest or beneficial to them. By understanding these irrational behaviours, behavioural economists attempt to develop strategies leveraging the natural cognitive process of human decision-making. While BE in economics focuses on economic behaviours, other fields have integrated theoretical principles of BE to influence people’s decision-making beyond economic matters. BE has recently been adopted to workplace management, especially in human resources practices, and has also shown a great potential in workplace health, safety, and facility management. This chapter discusses relevant theoretical principles and discoveries in BE relevant to the workplace. It will help workplace practitioners develop strategies for long-term behavioural changes through understanding of human cognitive biases and deviated behaviours.
