Behavioral economicsBehavioral economics studies the effects of psychological, cognitive, emotional, cultural and social factors in the decisions of individuals or institutions, and how these decisions deviate from those implied by classical economic theory. Behavioral economics is primarily concerned with the bounds of rationality of economic agents. Behavioral models typically integrate insights from psychology, neuroscience and microeconomic theory. The study of behavioral economics includes how market decisions are made and the mechanisms that drive public opinion.
Neoclassical economicsNeoclassical economics is an approach to economics in which the production, consumption, and valuation (pricing) of goods and services are observed as driven by the supply and demand model. According to this line of thought, the value of a good or service is determined through a hypothetical maximization of utility by income-constrained individuals and of profits by firms facing production costs and employing available information and factors of production.
Rational choice theoryRational choice theory refers to a set of guidelines that help understand economic and social behaviour. The theory originated in the eighteenth century and can be traced back to political economist and philosopher, Adam Smith. The theory postulates that an individual will perform a cost-benefit analysis to determine whether an option is right for them. It also suggests that an individual's self-driven rational actions will help better the overall economy. Rational choice theory looks at three concepts: rational actors, self interest and the invisible hand.
Decision-makingIn psychology, decision-making (also spelled decision making and decisionmaking) is regarded as the cognitive process resulting in the selection of a belief or a course of action among several possible alternative options. It could be either rational or irrational. The decision-making process is a reasoning process based on assumptions of values, preferences and beliefs of the decision-maker. Every decision-making process produces a final choice, which may or may not prompt action.
Heterodox economicsHeterodox economics is any economic thought or theory that contrasts with orthodox schools of economic thought, or that may be beyond neoclassical economics. These include institutional, evolutionary, feminist, social, post-Keynesian (not to be confused with New Keynesian), ecological, Austrian, complexity, Marxian, socialist, and anarchist economics. Economics may be called orthodox or conventional economics by its critics.
EconomicsEconomics (ˌɛkəˈnɒmᵻks,_ˌiːkə-) is a social science that studies the production, distribution, and consumption of goods and services. Economics focuses on the behaviour and interactions of economic agents and how economies work. Microeconomics analyzes what's viewed as basic elements in the economy, including individual agents and markets, their interactions, and the outcomes of interactions. Individual agents may include, for example, households, firms, buyers, and sellers.
Public choicePublic choice, or public choice theory, is "the use of economic tools to deal with traditional problems of political science". Its content includes the study of political behavior. In political science, it is the subset of positive political theory that studies self-interested agents (voters, politicians, bureaucrats) and their interactions, which can be represented in a number of ways – using (for example) standard constrained utility maximization, game theory, or decision theory.
Decision-making softwareDecision-making software (DM software) is software for computer applications that help individuals and organisations make choices and take decisions, typically by ranking, prioritizing or choosing from a number of options. An early example of DM software was described in 1973. Before the advent of the World Wide Web, most DM software was spreadsheet-based, with the first web-based DM software appearing in the mid-1990s. Nowadays, many DM software products (mostly web-based) are available – e.g.
Emotional choice theoryEmotional choice theory (also referred to as the "logic of affect") is a social scientific action model to explain human decision-making. Its foundation was laid in Robin Markwica’s monograph Emotional Choices published by Oxford University Press in 2018. It is considered an alternative model to rational choice theory and constructivist perspectives.
Group decision-makingGroup decision-making (also known as collaborative decision-making or collective decision-making) is a situation faced when individuals collectively make a choice from the alternatives before them. The decision is then no longer attributable to any single individual who is a member of the group. This is because all the individuals and social group processes such as social influence contribute to the outcome. The decisions made by groups are often different from those made by individuals.
Consensus decision-makingConsensus decision-making or consensus process (often abbreviated to consensus) are group decision-making processes in which participants develop and decide on proposals with the aim, or requirement, of acceptance by all. The focus on establishing agreement of at least the majority or the supermajority and avoiding unproductive opinion differentiates consensus from unanimity, which requires all participants to support a decision. The word consensus is Latin meaning "agreement, accord", derived from consentire meaning "feel together".
Predictive modellingPredictive modelling uses statistics to predict outcomes. Most often the event one wants to predict is in the future, but predictive modelling can be applied to any type of unknown event, regardless of when it occurred. For example, predictive models are often used to detect crimes and identify suspects, after the crime has taken place. In many cases, the model is chosen on the basis of detection theory to try to guess the probability of an outcome given a set amount of input data, for example given an email determining how likely that it is spam.
Predictive analyticsPredictive analytics is a form of business analytics applying machine learning to generate a predictive model for certain business applications. As such, it encompasses a variety of statistical techniques from predictive modeling and machine learning that analyze current and historical facts to make predictions about future or otherwise unknown events. It represents a major subset of machine learning applications; in some contexts, it is synonymous with machine learning.
Automated decision-makingAutomated decision-making (ADM) involves the use of data, machines and algorithms to make decisions in a range of contexts, including public administration, business, health, education, law, employment, transport, media and entertainment, with varying degrees of human oversight or intervention. ADM involves large-scale data from a range of sources, such as databases, text, social media, sensors, images or speech, that is processed using various technologies including computer software, algorithms, machine learning, natural language processing, artificial intelligence, augmented intelligence and robotics.
Fundamental analysisFundamental analysis, in accounting and finance, is the analysis of a business's financial statements (usually to analyze the business's assets, liabilities, and earnings); health; and competitors and markets. It also considers the overall state of the economy and factors including interest rates, production, earnings, employment, GDP, housing, manufacturing and management. There are two basic approaches that can be used: bottom up analysis and top down analysis.
Market timingMarket timing is the strategy of making buying or selling decisions of financial assets (often stocks) by attempting to predict future market price movements. The prediction may be based on an outlook of market or economic conditions resulting from technical or fundamental analysis. This is an investment strategy based on the outlook for an aggregate market rather than for a particular financial asset. The efficient-market hypothesis is an assumption that asset prices reflect all available information, meaning that it is theoretically impossible to systematically "beat the market.
