Have you ever thought how companies make people buy their products? Or why people buy 1+1 items in a supermarket? Everything of this is part of Behavioral economics.

Behavioral economics is a type of economics which is a mixture of psychology and economics. It analyzes peoples minds in buying or consuming and the way of marketing successfully by knowing what people want and what people prefer. It is a new concept apart from traditional economics where you should choose the safest way without risk. For instance, when you can earn 1 billion$ in a 10% of accuracy, and you can earn 1 million$ in a 90% of accuracy, people choose getting 1 million$. One example of Behavioral Economics is the fast-food company Subway. Subway blows out smells of bread on the street in order to increase customers. The company has a machine that blows out the scent of bread in every Subway shop. This is one of the reasons of Subway’s success.

Another example of Behavioral economics is in the World TOP drama Squid Game. During the second game, dalgona game, 218 doesn’t tell what the game is to his team and make the people go to each a different shape. Despite he knew what the game is and can lead everyone to the easiest shape. This is 218’s plan to drop half of the team so that he could get all the money himself. Choice 1 for 218 is telling what the game is and letting everyone of his team win. This is a choice where everyone can win. Choice 2 for 218 is not telling what the game so that only half can win. This might let 218 get more money, but is dropping, terminating half of his team.

In one experiment, there were 2 bottles of the same red wine. 1 bottle was more expensive than the other bottle. When the two bottles were taste tested by people, most people preferred the one that was more expensive. Even though, actually, they are the same red wine. This is also one intriguing example of Behavioral economics.

One sector of Behavioral economics is the Prisoner’s Dilemma. There are two prisoners in court, one is A, and another is B. There are 0 witnesses and if both betray each other, both has to serve two yrs in prison. If only A betrays, A would be set free, but B would serve 3 yrs in prison and vice versa. When both are silent, both serve 1 yr of prison. But people try testifying each other, even though there is a way for everyone to win.

Behavioral economics is one of the most important parts of economy. It can tell you how people think and also help you in marketing and other parts in business. All in all Behavioral economics is important to many parts of society.