Behavioral Economics
Behavioral Economics ArXiv ID: ssrn-245828 “View on arXiv” Authors: Unknown Abstract Behavioral Economics is the combination of psychology and economics that investigates what happens in markets in which some of the agents display human limitati Keywords: Behavioral Economics, Prospect Theory, Cognitive Biases, Heuristics, General (Economics) Complexity vs Empirical Score Math Complexity: 3.0/10 Empirical Rigor: 2.0/10 Quadrant: Philosophers Why: The paper is a theoretical and conceptual survey of behavioral economics, focusing on high-level ideas like bounded rationality and limits of arbitrage with minimal mathematical formalism or empirical data. It lacks backtests, datasets, or implementation details, positioning it as a philosophical/theoretical discussion rather than a quantitative trading strategy. flowchart TD A["Research Goal:<br>Understand deviations from<br>rational economic models"] --> B{"Methodology"} B --> C["Theoretical Modeling<br>e.g., Prospect Theory"] B --> D["Experimental Design<br>Labs & Field Studies"] C --> E["Data Inputs:<br>Psychological Heuristics &<br>Bias Observations"] D --> E E --> F["Computational Processes:<br>Agent-Based Simulation<br>& Probability Weighting"] F --> G{"Key Findings/Outcomes"} G --> H["Prospect Theory<br>Loss Aversion & Reference Dependence"] G --> I["Identified Cognitive Biases<br>e.g., Anchoring, Framing"] G --> J["Policy Implications<br>Nudges & Market Regulation"]