As illustrated in this Tampa Bay Times article, Richard Thaler (author of Nudge) won the Nobel Prize in Economics for his work in Behavioral Economics, which deals with decision making. The 9-million-kronor (approximately $1.1million U.S.) prize was awarded for Thaler's "understanding the psychology of economics" as stated by Swedish Academy of Sciences secretary Goram Hansson. Thaler, one of the founding fathers of behavioral economics, illustrates how people don't often make rational decisions. Read the article to discover more about Thaler's theories. Then conduct some research on Daniel Kahneman, another behavioral economist who won the Nobel Prize for economic sciences in 2002. Kahneman wrote the international best seller Thinking, Fast and Slow, within which you will find many of the groundbreaking studies that provided foundations in the field of behavioral economics. When we make decisions, often times we use fast thinking, which puts in motion our biases and habits (sometimes bad) that cause us to make decisions that aren't in our best interest in the long run. Help students to slow down their thinking by considering the consequences of their actions and choosing alternatives that might be better for their future. Then try some of the new free lesson plans that the Council for Economic Education has provided on EconEdLink.org to help your students understand the underlying concepts in behavioral economics. Standards-based Questions: SS.4.FL.2.2 Explain that people make choices about what goods and services they buy because they can't have everything they want. This requires individuals to prioritize their wants. What is something you want? Why can't we have everything we want all the time? How can you make better choices about the things you want? Do you need it right now? SS.8.FL.2.1 Explain why when deciding what to buy, consumers may choose to gather information from a variety of sources. Describe how the quality and usefulness of information provided by sources can vary greatly from source to source. Explain that, while many sources provide valuable information, other sources provide information that is deliberately misleading. What is something you want? Why can't we have everything we want all the time? How can you make better choices about the things you want? Conduct some research from a variety of sources. How can you judge the information you are gathering? How does this information help you to refine your choices? SS.912.FL.2.3 Discuss that when buying a good, consumers may consider various aspects of the product including the products features. Explain why for goods that last for a longer period of time, the consumer should consider the products durability and maintenance costs. What is something you want? Why can't we have everything we want all the time? How can you make better choices about the things you want? Conduct some research from a variety of sources. How can you judge the information you are gathering? How does this information help you to refine your choices? ˆFor example, consider buying a car. What are some of the things you should consider before making a final decision. You may like the idea or look of a car, but it is important to slow down your thinking and consider other aspects like the durability or maintenance costs! ...... ...... ...... Comments are closed.
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January 2022
CategoriesAuthorDeborah Kozdras, Ph.D. |