Behavioral Economics and the Analysis of Consumption and Choice

Behavioral economics (BE) in psychology focuses on the application of traditional microeconomics concepts to the study of behavior, particularly the cross-species analysis of consumption broadly defined and choice. Here, we review key concepts such as demand, substitution, and complementarity within a behavioral psychology framework, novel behavioral economics analysis techniques for quantifying demand elasticity and patterns of choice behaviors, and broader implications for organizational decision-making and empirical public policy.