Sigmund Freud (theory of economic psychology)

Sigmund Freud, primarily known for his work in psychology, also influenced economic psychology by suggesting that human behavior is driven by unconscious desires and motives. He believed that emotions, desires, and instincts, often shaped by early life experiences, significantly impact decision-making in economics. For example, consumers may make purchases not just for necessity but also to satisfy deeper psychological needs, such as status or security. Freud's ideas highlight the importance of understanding the psychological underpinnings of economic behavior, showing that choices are influenced by both rational thought and emotional factors.