3 Review(s)

The Influence of Psychological Factors on Decision-Making My work consistently bridges the gap between traditional economic theory and behavioral economics by emphasizing the role of human behavior and psychological factors in economic outcomes. My view argues that economics is not solely about resource allocation but also about the decision-making processes driven by human actions. This perspective is crucial for understanding why individuals or communities might make choices that appear irrational from a purely economic standpoint, such as prioritizing immediate gratification over long-term benefits in areas like health, education, or financial planning. These behavioral patterns directly impact how resources are utilized or misutilized within a society. Challenging the Assumption of Self-Interest My view challenges the traditional economic assumption that individuals are always self-interested and make purely rational decisions that lead to optimal outcomes. Instead, he suggests that human behavior often leads to economically irrational decisions. This divergence is critical when considering resource allocation, as decisions made based on emotions, social norms, or cognitive shortcuts can lead to suboptimal distribution or utilization of resources. For instance, herd mentality, a concept Lok highlights, can lead to collective irrational decisions in financial markets or consumption patterns, impacting resource distribution.