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Traditional Economics and Behavioral Economics

In the field of economics, many people think that traditional economics and behavioral economics are tit-for-tat contradictions; In fact, traditional economics and behavioral economics are like two different fruits on a tree.

Traditional economics and behavioral economics study the same problem, that is, they both study the laws of market operation, but the research angles and directions are different.

Traditional economics studies what the market should look like and grasps the macro trend of the market; Behavioral economics studies what the real market actually looks like, and it is an exploration of the micro-operation of the market.

It is precisely because of the underlying logical differences in their research directions that they have grown different fruits-traditional economics guides us to explore the long-term value law of the market; Behavioral economics requires us to pay more attention to people's wrong behaviors in a certain period and how to use these wrong behaviors in reverse operation.

So many times, for specific economic phenomena and problems, we need the cooperation of traditional economics and behavioral economics.

For example, for personal investment, traditional economics is the theoretical basis. Learning traditional economics is like reading Sun Tzu's Art of War, from which we can find out the internal and long-term laws.

But if you only know how to talk on paper, you will undoubtedly be unable to command the battle; Therefore, the purpose of studying behavioral economics is to face actual combat and formulate your own coping strategies by understanding the thoughts and behaviors of others. The so-called "know yourself and know yourself, and win every battle" is also the truth.

By trying to integrate traditional economics with behavioral economics, our understanding of various economic behaviors in the real world can be promoted to a new dimension.