The field of economics that draws on psychology and neuroscience to understand how and why individuals make decisions is known as:
A) Keynesian economics.
B) game theory.
C) rational expectations.
D) behavioral economics.

Question

Quizplus · Accepted Answer

Behavioral economics seeks to understand how psychological and neurological factors influence decision-making, and how individuals deviate from rationality in their economic choices. Keynesian economics is a macroeconomic theory focused on government intervention in the economy. Game theory is a mathematical approach to understanding strategic decision-making. Rational expectations theory holds that individuals make economic decisions based on their rational expectations of future events. None of these fields specifically incorporate psychological or neurological factors as central to their analysis in the way that behavioral economics does.

The Field of Economics That Draws on Psychology and Neuroscience