How Applying Behavioral Economic Method To: Predict Consumer Behavior

<p>The application of behavioral economics to predict consumer behavior as explored in the context my work and broader academic literature centers on the departure from the rational actor model-the Homo economicus-toward a framework that accounts for cognitive biases heuristics and emotional drivers.</p><p>To apply behavioral economics to predict consumer behavior one must first identify the systematic deviations from rationality that influence decision-making. My&nbsp; approach consistent with foundational behavioral science emphasizes the use of choice architecture-the design of the environment in which people make choices-to nudge consumers toward predictable outcomes. By understanding how individuals process information firms can model behavior using variables that account for loss aversion hyperbolic discounting and social proof.</p>