Behavioral Economics and Behavioral Economics Principles in Game Theory

About this Podcast

HOST: Welcome to our podcast, today we're talking with Dr. Jane Smith, an expert in Behavioral Economics and Game Theory. She's here to tell us about her new course, "Behavioral Economics and Behavioral Economics Principles in Game Theory". Dr. Smith, can you give us a brief overview of this course? GUEST: Sure! This course blends psychology and economics to study how cognitive biases and emotions influence decision-making. We then extend this to examine strategic interactions, analyzing how irrationality and bounded rationality affect game outcomes. HOST: That sounds fascinating! Can you share a personal experience where you saw these principles at work in the real world? GUEST: Absolutely. I once consulted for a company struggling with auction design. By applying prospect theory and loss aversion, we were able to restructure the auction to yield significantly better results. HOST: Intriguing! And how does this field fit into current industry trends? GUEST: Well, behavioral economics is becoming increasingly relevant as businesses recognize the importance of understanding customer behavior. It's a powerful tool for improving predictive modeling and decision-making. HOST: What are some challenges faced in this field or when teaching this subject? GUEST: One challenge is overcoming the misconception that people always make rational decisions. In reality, heuristics often play a big role in our choices. HOST: Where do you see this field going in the future? GUEST: I believe we'll see more integration of behavioral economics into traditional economics and business strategies. It's a rapidly evolving area with a lot of potential. HOST: Dr. Smith, thank you for sharing your insights with us today! If you're interested in learning more about Behavioral Economics and Game Theory, check out Dr. Smith's course. Until next time, keep exploring!