Behavioral economics and healthcare: how interlinked are they?

Abstract

People make decisions all the time. As mainstream economics suggests that people in the market know their preferences. They will buy less if the price of a product increases and they will buy more if the price of the product reduces. But sometimes people make complex decisions intuitively or after deliberating, depending on the state they are in. Sometimes, people make decisions based on how the problem is framed. Behavioural economics make assumptions that not all people are rational, at least not all the time. The rational choice made by people are systematic and they can be predicted. Daniel Kahneman and Amos Tversky published an article in Econometrica "Prospect Theory: An Analysis of Decision Under Risk" (Kahneman and Tversky 1979) in which he stated that people will experience too much pain after losing an amount than experiencing joy after gaining a similar amount.i (1)