General Principles of Behavioral Economics in the Context of Healthcare

Abstract

This chapter investigates the core principles of behavioral economics in the context of healthcare decision-making. By examining System 1 (automatic thinking) and System 2 (deliberative thinking), it highlights how cognitive biases and heuristics shape medical decisions for both professionals and patients. Key concepts include prospect theory, which explains risk aversion in gains and risk-seeking in losses, and the impact of framing on perception and choices. It also covers loss aversion and risk management problems, and how convenience and default options drive behavior. The powerful effects of expectations and placebos on health outcomes are also discussed, along with the influence of social proof, emotional states, human adaptability, and the endowment effect on healthcare behaviors. This chapter highlights how human thinking actually operates with regard to various frameworks.

Citation

Yıldırım, A. (2024), "General Principles of Behavioral Economics in the Context of Healthcare", Behavioral Economics in Healthcare, Emerald Publishing Limited, Leeds, pp. 9-39. https://doi.org/10.1108/978-1-83662-080-820241002