Behavioural economics investigates the psychological processes that drive certain choices
The human brain is as fascinating as it is impenetrable, so much so that many of the processes that drive people to behave in a certain way are still a mystery to the scientific community. Having said this, research has made great strides over the past few decades, and has begun to disprove many theories that we had previously considered beyond reproach.
This research falls within the field of a discipline called ‘behavioural economics’, which combines the principles of psychology and economics, in order to explain how our decision-making processes are based on certain factors. According to expert Dan Ariely, one of the greatest limitations of our theories about the human mind is that we identify it rationally. As the author points out, rationality is only one of the forces that leads people towards a given choice or action, and many of the motivations behind certain behaviours are completely irrational. His experiments have shown that irrationality is actually a continuous and systematic factor, and guides people in every aspect of their lives, whether it be choosing a partner, evaluating a property, judging the quality of a drink, buying a product, or deciding how to help a friend. Therefore, irrationality can be considered a predictable human quality, which does not abide by the laws of rationality, but which has its own precise way of working.
Over the course of his career, the author has focused on outlining the main factors that reinforce irrationality, and has developed a clear theory on the nature of human relationships and how they are connected to the laws of the market and society. He discovered that various types of emotions and cognitive biases are the reason why many current systems fail to value the extraordinary complexity of each and every human being.