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18 February, 01:49

What is the difference between classical economics and behavioral economics?

1: Classical economics deals with investing money and behavioral economics deals with spending.

2: Classical economics refers to 19th century economics while behavioral economics deals with modern economics.

3: Classical economics assumes people are rational and logical while behavioral economics adds psychology to the mix.

4: There is no difference. They are different terms for the same thing.

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  1. 18 February, 02:07
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    3. Classical economics assumes people are rational and logical while behavioral economics adds psychology to the mix.

    A major theory in classical economics is that human beings are rational and, given the necessary information they will make rational decisions and act rationally, however, Behavioral economics assumes that people are irrational players.
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