Behavioral Economics Concepts

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Loss Aversion

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The tendency to prefer avoiding losses over acquiring equivalent gains.

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Herd Mentality

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The phenomenon where individuals follow the majority without independent thought.

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Confirmation Bias

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The tendency to search for, interpret, and remember information that confirms one's preconceptions.

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Overconfidence

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A cognitive bias characterized by an overestimation of one's actual ability to perform tasks or make accurate judgments.

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Endowment Effect

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The hypothesis that people ascribe more value to things merely because they own them.

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FOMO (Fear of Missing Out)

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The anxiety that an exciting or interesting event may currently be happening elsewhere, often aroused by posts seen on social media.

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Sunk Cost Fallacy

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The misconception that one should continue an endeavor because of previously invested resources (time, money, or effort).

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Hedonic Adaptation

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The observed tendency of humans to quickly return to a relatively stable level of happiness despite major positive or negative events or life changes.