Question

Please explain and give a summary of where behavioral finance/behavioral economics improved health care. What do you think of this field of study? What are some positives and what are some negatives of this type of approach in health care?

Answer 1

Putting the facets of behavioral economics together, the Putting these facets of behavioral economics together, the findings imply several insights about what drives human behavior. First, compared with what the traditional economic theory of decision making would predict, people tend to be overly oriented to the present rather than to the future; they are more concerned about losing something they already have and know than about gaining something they have not yet experienced; and they are very sensitive to monetary incentives, especially those that are most tangible. Second, people are cognitively limited. As a result, to make the complicated necessary decisions repeatedly in daily life, they use heuristics or rules of thumb rather than going through all possible choices. In that regard, people are influenced by how choices are framed, and because so much choice can lead to decision fatigue, their decisions may not be consistent. Third, people's preferences are mutable. Not only do they evolve over time, but they are influenced greatly by the environment and can be manipulated, especially through advertising. All these features make real-world decision making not only more interesting than the hyperrational calculus assumed by economic theory, but also more perilous than economists have previously understood, particularly in areas touching on health and health care. imply several insights about what drives human behavior. First, compared with what the traditional economic theory of decision making would predict, people tend to be overly oriented to the present rather than to the future; they are more concerned about losing something they already have and know than about gaining something they have not yet experienced; and they are very sensitive to monetary incentives, especially those that are most tangible. Second, people are cognitively limited. As a result, to make the complicated necessary decisions repeatedly in daily life, they use heuristics or rules of thumb rather than going through all possible choices. In that regard, people are influenced by how choices are framed, and because so much choice can lead to decision fatigue, their decisions may not be consistent. Third, people's preferences are mutable. Not only do they evolve over time, but they are influenced greatly by the environment and can be manipulated, especially through advertising. All these features make real-world decision making not only more interesting than the hyperrational calculus assumed by economic theory, but also more perilous than economists have previously understood, particularly in areas touching on health and health care.