Behavioral Economics

Behavioral economics examines how psychological biases influence economic decision-making, deviating from the traditional assumption of perfect rationality. Current research focuses on identifying and modeling these biases in both humans and artificial intelligence systems, employing techniques like utility theory, reinforcement learning, and agent-based modeling to understand their impact on various domains, including finance and intertemporal choices. This field is crucial for improving the design of economic policies, financial products, and AI systems by accounting for the inherent limitations and biases in human and artificial decision-making processes. The insights gained are increasingly relevant for developing more robust and ethical AI applications and for creating more effective interventions to improve human financial well-being.