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Behavioral Economics, as a subdiscipline of economics is the study of the effects of cognitive, emotional and psychological factors on the individuals' economic decision-making.As a matter of fact, economics is all about people's behavior and choice.Economics traditionally conceptualizes individuals as Homo Economicus (rational, self-interested maximizers etc.)In general, the traditional economics has ignored cognitive bias and heuristics that results in systematic errors in people's decision making and choice.This paper is an introductory study that aims to explore the interaction between psychology and economics.The short history of behavioral economics will presented and the main differences of behavioral economics from the traditional economics will be summarized.
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