Behavioral Economics

the feelings of anxiety that arise from the belief that you may be missing out on rewarding experiences that others are having

• The Bandwagon Effect

• Herd Mentality

• The Endowment Effect

• Fear of Missing Out (FOMO)

the tendency people have to be more confident in their own abilities, such as driving, teaching, or spelling, than is objectively reasonable

• Overconfidence Bias

•   The Bandwagon Effect

• Confirmation Bias

• Loss Aversion

refers to an emotional bias that causes individuals to value an owned object higher, often irrationally, than its market value

• Confirmation Bias

• Endowment Effect

• Fear of Missing Out (FOMO)

• Loss Aversion

the tendency to process information by looking for, or interpreting, information that is consistent with one’s existing beliefs

• Loss Aversion

• Mental Accounting

• Overconfidence Bias

• Confirmation Bias

the phenomenon where a real or potential loss is perceived by individuals as psychologically or emotionally more severe than an equivalent gain

• Mental Accounting

• Bandwagon Effect

• Loss Aversion

• Confirmation Bias

the phenomenon where a person is reluctant to abandon a strategy or course of action because they have invested heavily in it, even when it is clear that abandonment would be more beneficial

• Endowment Effect

• Sunk Cost Fallacy

• Confirmation Bias

• Bandwagon Effect

the amount of pain (or pleasure) we get from feeling like we paid more (or less) than something is really worth

• Sunk Cost Fallacy

• Mental Accounting

• Confirmation Bias

• Transaction Utility

separating money into imaginary categories in your mind

• Transaction Utility

• Mental Accounting

• Sunk Cost Fallacy

• Confirmation Bias

this is the psychological phenomenon in which people do something primarily because other people are doing it, regardless of their own beliefs, which they may ignore or override

• Confirmation Bias

• Bandwagon Effect

• Endowment Effect

• Herd Mentality

You want to see a movie that almost everyone has seen and is raving about.  What kind of economic behavior best describes this situation?

• Herd Mentality

• Bandwagon Effect

• Congitive Bias

• Endowment Effect