Cognitive Economics

Cognitive Economics is an interdisciplinary field that combines insights from economics and cognitive science to understand how people make decisions and process information. It examines how mental models, biases, and emotional factors influence economic behavior. Instead of assuming people always make rational choices, cognitive economics recognizes that decision-making can be affected by limited knowledge, cognitive limitations, and social influences. This approach helps explain real-world economic behaviors, such as spending, saving, and investing, by acknowledging the complexity of human thought processes and the impact of these processes on market dynamics.