Glossary
Behavioral Economics
A field that combines psychology and economics to study how real people make decisions, often in ways that deviate from purely rational models.
Behavioral economics examines how people actually make decisions — as opposed to how economic theory assumes they do — finding that humans are predictably irrational in specific ways: we’re loss-averse, influenced by framing, swayed by defaults, and prone to overconfidence. This has practical relevance to AI behavior design in two ways. First, users interact with AI products through the lens of their own behavioral economic tendencies — how you frame a model’s refusal, for instance, significantly affects how users perceive and respond to it. Second, the people who rate, evaluate, and design AI systems bring these same tendencies to their work. For behavior architects, behavioral economics is useful background for anticipating how users will experience model behavior and how teams should interpret feedback data.