Cashew to Nudges

Running head: ECONOMICS ASSIGNMENT
Economics Assignment
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Reflective Essay on Reading 1: Cashew to Nudges
The book acknowledges about the evolution of behavioral economies which is used as an
important tool to study the overall impact on economies. There are lot of factors that goes
beyond economics which cannot be passed upon one particular theory (Thaler 2018). The
amount and savings and investment depends on the individual and how much the person values
the good. It unfolds the story of growth and development with economics and the behaviour of
individuals. It enables to understand the theory of life cycle hypothesis which estimates how
much people expect to earn over their lifetime, will their plan be efficient, how to divide the
level of earnings suitably. Suppose the planned annual income is rising with the same level of
income (Thaler and Ganser 2015).
There exists several shifts in the study of consumer behaviour such as buying expensive
items, media issues, boom of start-ups, living standards, which would hamper the planned
outcome of individuals. These factors led to rising concerns for retirement savings and state
started planning about social security benefits and pensions. The paper provides a clear
indication how the reference and behaviour of individuals have led to implementation of
economic policies. Thus, behavioral economies establishes the fact that the study of economics
and economic policies are dependent on the way individuals behave.
Reflective Essay on Reading 2: Behavioural Portfolio theory
The paper puts forth a positive behavioral theory which is used as an alternative of mean-
variance portfolio theory as proposed by the Markowitz (Shefrin 2015). By, reading the paper, I
was able to understand about the behavioral portfolio theory in a more simplified way. There is a
wide difference in the portfolios of mutual fund companies to that of mean-variance of