We love to think that we act rationally most of the time, especially when it comes to the choices we make with our money. However, behavioral economics tells us that humans are notoriously irrational when dealing with money. Today we dive into two basic behavioral economic principles and discuss things to be aware of when it comes to money. 

References: 

Worchel, S., Lee, J., & Adewole, A. (1975). Effects of supply and demand on ratings of object value. Journal of personality and social psychology, 32(5), 906.

Novemsky, N., & Kahneman, D. (2005). The Boundaries of Loss Aversion. Journal of Marketing Research, 42(2), 119–128.