Abstract
Behavioral economics (BE) is a relatively new field within economics that incorporates insights from psychology that can be harnessed to improve economic decision making with the potential to enhance good health and well-being of individuals and societies, the third of the United Nations Sustainable Development Goals. While some of the psychological principles of economic decision making were described as far back as the 1700s by Adam Smith, BE emerged as a discipline in the 1970s with the groundbreaking work of psychologists Daniel Kahneman and Amos Tversky. We describe the basic concepts of BE, heuristics (decision-making shortcuts) and their associated biases, and the BE strategies framing, incentives, and economic nudging to overcome these biases. We survey the literature to identify how BE techniques have been employed to improve individual choice (focusing on childhood obesity), health policy, and patient and healthcare provider decision making. Additionally, we discuss how these BE-based efforts to improve health-related decision making can lead to sustaining good health and well-being and identify additional health-related areas that may benefit from including principles of BE in decision making.
Highlights
Behavioral economics (BE) is a relatively new field within the discipline of economics
Aldieri and colleagues [1] find that inequality, inclusive of health inequality, can undermine well-being, Usai and colleagues note that studies over the past thirty years have successively supported that well-being is vital for the development of economies and societies [2]
We describe the basic concepts of BE, how and why decision makers use heuristics, the biases entailed, and BE strategies to overcome these biases for improved decision making
Summary
Behavioral economics (BE) is a relatively new field within the discipline of economics. It harnesses insights from psychology to improve economic decision making in ways that have the potential to enhance good health and well-being of both individuals and societies, the third of the United Nations Sustainable Development Goals (UNSDG). While some of the psychological principles of economic decision-making were described by Adam Smith as early as the 1700s, BE emerged as a discipline in the 1970s because of the groundbreaking work of psychologists Daniel Kahneman and Amos Tversky. This essay contributes to practice by bringing the principles of BE to a wider audience in a position to employ its concepts to improve health and well-being as they could be used to support UNSDGs. We describe the basic concepts of BE, how and why decision makers use heuristics (decision making shortcuts), the biases entailed, and BE strategies to overcome these biases (framing, incentives, and economic nudging) for improved decision making. We discuss how these BE-based efforts to improve health-related decision making can lead to sustaining good health and well-being and identify additional healthrelated areas that may benefit from including principles of BE in decision making
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