Behavioral Economics

Traditional economics are based upon the assumption that the individual in business is highly rational, especially in this age of information, education, and technology. A branch of economics, called behavioral economics, tries to understand how the standard economic models are affected when the individuals involved don't know everything, are compassionate, and have limited willpower when it comes to such things as chocolate. In other words, behavioral economics studies the economics of humans, rather than the robot-like persons which we like to believe are making decisions in the field of business. Thus we have the factors of bounded rationality, bounded self-interest, and bounded willpower to consider in the fields of business. Two sites for more information are http://www.iies.su.se/nobel/papers/Encyclopedia%202.0.pdf and http://harvardmagazine.com/2006/03/the-marketplace-of-perce.html.