Research on the Heuristic Bias in Behavioral Economics

Abstract

Behavioral economics is a branch of economics. It studies people's decision-making patterns and behavioral principles when making decisions. Behavioral economics has penetrated into people's lives, and heuristics are everywhere. This paper shows several classifications and experimental investigations of heuristic bias in behavioral economics. It is widely believed that heuristic bias means that when people want to judge a complex, fuzzy, and uncertain event, they often take some shortcut in thinking due to the lack of effective methods, such as relying on past experience, analyzing and processing past experience, getting inspiration, and then making judgments using the inspiration. However, through literature reading and analysis, it can be found that people don't always make such choices when faced with problems, or they stay rational.