Explaining Aspects of Economic Behavior with the Help of Quantitative Methods

When we make judgments and decisions about our lives, we like to think that we are objective, logical, and capable of evaluating all the information we have. In reality, however, our judgments and decisions are often full of errors and are influenced by a wide variety of prejudices. Today's economy has many exciting topics. Since economic agents are likely to make decisional errors, it is absolutely necessary to pay attention to and examine the cognitive, emotional and subjective factors that can influence our decision-making process. In this paper, the authors present a test case study (prospectus) that claims that people value gains and losses differently. Also, the authors of this paper want to study how individuals think and act on how to distribute income for the present and for the future, and how much the herd behavior, prospect theory, excessive optimism, mental accounting, in these different situations, matters. The field of behavioral economics uses as methods for predicting results not only mathematical models but also real-world data on consumer behavior so that the choices can be truly understood.