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behavioral-economics-guide

Behavioral economics research methods and key frameworks

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# Behavioral Economics Guide

Conduct behavioral economics research using experimental methods, prospect theory, nudge frameworks, and key empirical tools for studying decision-making under bounded rationality.

## Core Theoretical Frameworks

### Prospect Theory (Kahneman & Tversky, 1979)

People evaluate outcomes relative to a reference point, with losses looming larger than equivalent gains:

```
Key features:
1. Reference dependence: Utility is defined over gains and losses, not absolute wealth
2. Loss aversion: lambda ≈ 2.25 (losses hurt ~2.25x more than equivalent gains)
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