Behavioral Economics

People feel the pain of losses roughly twice as strongly as the pleasure of equivalent gains. This asymmetry leads to risk-averse behavior when facing potential gains but risk-seeking behavior when facing potential losses.

The tendency to rely too heavily on the first piece of information encountered (the 'anchor') when making decisions, even when the anchor is arbitrary or irrelevant.

A theory developed by Kahneman and Tversky describing how people evaluate potential gains and losses relative to a reference point rather than in absolute terms, and how they weight probabilities nonlinearly.

The concept that indirect suggestions and positive reinforcement can influence behavior and decision-making more effectively than direct instruction, mandates, or enforcement.

The preference for the current state of affairs, where any change from the baseline is perceived as a loss. People tend to stick with default options even when better alternatives exist.

The tendency to judge the likelihood of events based on how easily examples come to mind, leading to overestimation of dramatic or recent events.

The way information is presented (framed) significantly affects decisions and judgments. The same information can lead to different conclusions depending on how it's framed.

People ascribe more value to things merely because they own them. This leads to a gap between the price people are willing to pay for a good and the price at which they're willing to sell it.

The tendency to prefer smaller, sooner rewards over larger, later rewards, with the preference increasing as the delay becomes more immediate.

The tendency to continue investing in something because of previously invested resources (time, money, effort) rather than evaluating the current and future value.