The New Rationality of Economics

During this time of information overload people are adapting to our new busy and complex lifestyles by making their economic choices using heuristics (mental shortcuts, making automatic choices with a minimum of thinking) and biases (a tendency of automatic likes & dislikes).  Economic psychologists and behavioral economist are combining with applied social psychologist to help explain and predict micro-economic behavior (the individual consumer, investor, and entrepreneur), as well as, trying to know macro-economics (consumer confidence) for marketing and behavior towards finances.  The combination of theories will help with knowledge pertaining to "game theory, decision making and choices, social orientation and social references." 

Some of the theories are:  Prospect theory, by combining  or integrating a loss it has a smaller negative effect than two separate losses.  There is the endowment effect which contends that people get attached to their own "stuff" and are less willing to sell or to give away these things.  Instead, they will think they are worth much more if they try to sell them.  There is also the status-quo bias that people will tend to stay with a something familiar and/or the default option rather than change to an alternative choice.  And one of my favorites is the sunk-costs effect that we tend to keep pumping money into a lost cause because we don't want to suffer the loss.  These are just a drop in the bucket of examples of the new rationality of economics due to our changing financial world and the necessity of realizing how the consumer thinks and behaves so that the influence agents can better serve us...or is it to serve them...I not clear!