Introduction-Question 7(Gracia Gilreath)
I have learned that while economists make decisions based on cost and benefit analysis, they are not perfect and do make mistakes, like the way that many well-known economists did not anticipate the financial crisis that took place in 2005. This was because psychology was not added into the formula in order to come to the conclusion that behavioral economics was involved. Since economists base their thinking on rationality, it is hard to comprehend a decision that is made irrationally, which is why behavioral economics is needed. It involves the way that our brains work and why we make the decisions we do even though they may be irrational. This is what sparks me interest because I'm intrigued by how the human brain can effect decisions, which result in the different outcomes of economic situations.