An Intern’s Deep Dive into Behavioral Economics

Stephanie Cook is a growing excessive faculty senior at Fort Worth Country Day in Fort Worth, Texas, the U.S. We first met Stephanie final summer time while she won Round 3 of the KWHS Comment & Win contest for her non-public story approximately Taekwondo on the article Advice from New York Stock Exchange President Stacey Cunningham.

More currently, Stephanie reached out to us to pitch a private essay approximately her growing fascination with behavioral economics. This sort of financial evaluation applies psychology to human behavior as a way of explaining economic decision-making.

Behavioral Economics

In any other KWHS pupil essay that is but unpublished, Rachit Surana, a high school senior at La Martiniere for Boys in Kolkata, India, explains behavioral economics like this: “I’ve made an interesting remark after I go shopping with my grandmother. The available products are constantly changing. But I realize that we forestall greater frequently within the stores that provide wider alternatives to shop for. That is predicted, right? But here’s wherein it receives curious. We really buy more frequently from the shops that offer fewer alternatives. This theory is referred to as choice paralysis. Whenever our brain is confronted with a complex selection, it both tries to take a shortcut or to keep away from the choice absolutely — so, while purchasing, we might purchase much less. In contrast, the shop with fewer options offers a less complicated decision and, consequently, better conversion.”

Stephanie has taken her financial hobbies a step similarly by immersing herself in field research through a far-off internship at the University of Southern California’s Los Angeles Behavioral Economics Lab. She writes about her studies in this private essay.

On each day’s foundation, we’re all confronted with one primary behavior – selection making. Have you ever idea approximately why you ensure selections and if they’re rational? By no means had I given a good deal notion to my choice-making impact until I commenced my remote internship in behavioral economics with Professor Brocas from the University of Southern California.

Let me again up a minute and explain how I even got interested in behavioral economics, which merges economics and psychology. Positioned, it researches and attempts to understand selection making to make monetary fashions greater accurate.

We Are ‘Predictably Irrational’

Last summer, I attended an application called “Economics for Leaders,” a program run through the Foundation for Teaching Economics. I fell in love with economics and using economic evaluation to tackle public coverage troubles.

Soon after, I started my university excursions. During my first go to Duke University in North Carolina, I discovered that Professor Dan Ariely was a highly regarded behavioral economist. Through my studies, I sold and studied his ebook, Predictably Irrational. It highlighted how humans make decisions without rationalizing their consequences. A simple example is how we react to the promise of free services or products. We may bounce at the hazard to take advantage of a free day at the museum, but we don’t consider the lengthy lines and hour-lengthy wait to see one show off.

My research then led me to discover that a Nobel Prize in Economics was provided to Professor Thaler of Chicago University for developing “nudge theory.” This behavioral economic theory indicates that superb reinforcement and the oblique idea can affect decisions and movements without figuring out what is happening to them. A realistic instance is of a grocery keep putting arrows on the floor main to the produce department. The research confirmed that this easy nudge resulted in 9 out of 10 humans following the arrows and increasing substantially.

The more I learned about behavioral economics in the ultimate summer season, the more determined I became to find an internship in the field. I explored whether or not any universities might tackle a growing excessive school junior, instead of simply graduate students who already had a university diploma. I then stumbled across the University of Southern California’s website for his or her Los Angeles Behavioral Economics Lab (LABEL). As I dug deeper into the website, I located that the faculty familiar site visit remote interests and, every now, lanterns. So, I reached out to the director, Professor Isabelle Brocas, sent a résumé, and wrote an essay about my interest in this field and why I wanted to be concerned.