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 in the article Advice from New York Stock Exchange President Stacey Cunningham.

Currently, Stephanie reached out to us to pitch a private essay about her growing fascination with behavioral economics. This sort of financial evaluation applies psychology to human behavior to explain 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In any other KWHS pupil essay that is but unpublished, Rachit Surana, a high school senior at La Martiniere for Boys in Kolkata, India, explains behavioral economics like this: “I’ve made an interesting remark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 buy more frequently from shops that offer fewer alternatives. This theory is referred to as choice paralysis. Whenever our brain is confronted with a complex selection, it tries to take a shortcut or to keep away from the choice — 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 wondered why you ensure selections and if they’re rational? By no means had I given a good notion of 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 for 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 visit to Duke University in North Carolina, I discovered 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-length wait to see one show off.

My research led me to discover that NobProfessor Thaler of Chicago University received El Prize in Economics and was developing “nudge theory.” This behavioral economic theory indicates that superb reinforcement and oblique ideas can affect decisions and movements without figuring out what is happening to them. A realistic instance is when a grocery keeps putting arrows on the floor to the produce department. The research confirmed that this easy nudge resulted in 9 out of 10 humans following the hands 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 number of school juniors instead of graduate students who already had a university diploma. I then stumbled across the University of Southern California’s website for its Los Angeles Behavioral Economics Lab (LABEL). As I dug deeper into the website, I found that the faculty familiar site visit remote interests and lanterns every now. So, I contacted 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.