Behavioural Economics

Behavioral economics, along with the related sub-field behavioral finance, studies the effects of psychological, social, cognitive, and emotional factors on the economic decisions of individuals and institutions and the consequences for market pricesreturns, and resource allocation, although not always that narrowly, but also more generally, of the impact of different kinds of behavior, in different environments of varying experimental values.

There are various factors which affect the financial decision making of an individual of which demographic variables like age, gender and occupation and personal financial risk tolerance are the most important ones. Risk tolerance is a crucial factor that influences a wide range of financial decisions. Risk tolerance is defined as individuals willingness to engage in a financial activity whose outcome is uncertain

Behavioral economics is primarily concerned with the bounds of rationality of economic agentsBehavioral models typically integrate insights from psychologyneuroscience and microeconomics theory; in so doing, these behavioral models cover a range of concepts, methods, and fields (Ref: Wikipedia)

Some interesting blogs on Behavioral Economics are the following:

EXPERIMENTAL AND BEHAVIORAL ECONOMICS

BEHAVIORALECONOMICS.COM BLOG

DAN ARIELY'S BLOG


For free eBooks on this interesting field, please click on the following link:

FREE EBOOKS ON BEHAVIORAL ECONOMICS AND FINANCE