Behavioral Analysis & Self- Introspection

ON
BEHAVIORAL ECONOMICS
PGDM 2023-25

SUBMITTED BY:

Name: Keshav Somani

Roll No: 218

Batch: PGDM DELTA

Under the Guidance of,

Dr. Hardik Brahmbhatt

Associate Professor

Faculty of Finance and Economics

December – 2023
Q1) What is law of attraction and how it is connected with behavioral economics?

Ans The Law of Attraction is a concept that suggests that positive or negative thoughts bring
positive or negative experiences into a person's life. In other words, it posits that like attracts
like, and by focusing on positive or negative thoughts, a person can bring positive or negative
outcomes into their life. The Law of Attraction is often associated with the idea that thoughts
have a vibrational frequency that attracts similar frequencies from the universe.

Behavioral economics, on the other hand, is a field of study that combines insights from
psychology and economics to understand how individuals make economic decisions. It
recognizes that people often deviate from purely rational decision-making and are influenced by
cognitive biases, emotions, and social factors.

The connection between the Law of Attraction and behavioral economics lies in the
psychological aspects of decision-making. Both concepts acknowledge the role of thoughts,
emotions, and beliefs in shaping behavior:

1. Cognitive Biases: Behavioral economics identifies various cognitive biases that affect
decision-making, such as confirmation bias, anchoring, and availability heuristic. These biases
can influence the way individuals perceive and interpret information, which aligns with the idea
that one's thoughts and beliefs can shape their reality in the Law of Attraction.

2. Emotional Influences: The Law of Attraction emphasizes the role of emotions in attracting
experiences. Behavioral economics recognizes the impact of emotions on decision-making,
illustrating that emotions can drive economic choices, often leading to decisions that may not be
entirely rational.

3. Expectations and Self-Fulfilling Prophecies: The Law of Attraction suggests that expectations
and beliefs can shape outcomes. Similarly, behavioral economics recognizes the role of
expectations in influencing behavior, as individuals' expectations about the future can impa ct
their decisions and actions.

It's important to note that while there may be some parallels between the concepts, the Law of
Attraction lacks empirical support from scientific research, and its claims are often considered
metaphysical or pseudoscientific. In contrast, behavioral economics is a well-established and
empirically grounded field within the broader field of economics. When discussing these topics
together, it's crucial to differentiate between evidence-based scientific principles and more
speculative or philosophical ideas.

Q2) Explain Priorities and Preferences with reference to your dreams.

Ans Priorities and preferences play a crucial role in shaping the pursuit of one's dreams and
goals. Let's break down these concepts in the context of realizing our dreams:
1. Priorities:
* Definition: Priorities are the things that are regarded as more important or deserving of
attention and resources. They represent the order or ranking of tasks, goals, or values based on
their significance or urgency.

* Application to Dreams: When it comes to our dreams, setting priorities involves identifying
and ranking the various elements that contribute to the fulfillment of those dreams. This may
include specific tasks, actions, or lifestyle choices that align with our overarching goals.

2. Preferences:
* Definition: Preferences refer to the liking or favoring of one thing over another. They are
subjective and reflect individual tastes, inclinations, or choices based on personal values and
experiences.

* Application to Dreams: Our preferences come into play when you make choices related to our
dreams. This could involve the preferred methods you use to pursue our goals, the type of
environment we thrive in, or the specific aspects of our dream that resonate with you the most.
Understanding our preferences helps us tailor our approach to align with what feels most
authentic and fulfilling for us.

In the pursuit of my dreams:

* Identifying Priorities: Consider what steps or actions are most critical to achieving our dreams.
These could be short-term objectives that contribute to long-term success. For example, if our
dream is to become a successful entrepreneur, priorities might include acquiring relevant skills,
building a network, and developing a business plan.

* Aligning Preferences: Take into account our personal preferences, strengths, and values. If our
dream involves a career, think about the work environment, industry, or role that aligns with our
preferences. This alignment can contribute to a more satisfying and sustainable journey towards
our dreams.

* Balancing Trade-Offs: Sometimes, pursuing one aspect of our dream may conflict with
another. Understanding our priorities helps us make informed decisions when trade-offs are
necessary. Balancing our preferences within these trade-offs ensures that we stay true to what
matters most to us.

Ultimately, achieving our dreams involves a dynamic interplay between setting clear priorities,
understanding our preferences, and making choices that align with both. Regularly reassessing
and adjusting these priorities and preferences can be important as circumstances change and as
we gain new insights and experiences on our journey.
Q3) How ‘determining is essential’ with context to your dream or goal?

Ans The phrase "determining is essential" suggests that making clear and decisive decisions is
crucial, especially when it comes to pursuing our dreams or goals. Let's explore why
determination is essential in the context of achieving our aspirations:

1. Setting a clear direction: Having a well-defined dream or goal provides a north star, guiding
our choices and actions towards its achievement. This clarity in determination removes
ambiguity and keeps us focused on the intended path, even when faced with obstacles.

2. Building unwavering resolve: Determination acts as the fuel that propels us forward,
especially when the journey gets challenging. It's the unwavering commitment that keeps us
going despite setbacks, failures, and moments of doubt. This resoluteness ensures we don't give
up easily and persevere through difficulties.

3. Driving consistent action: Merely dreaming or setting a goal is not enough; achieving it
requires consistent action. Determination translates those dreams into concrete steps, motivating
us to take daily actions, no matter how small, that move us closer to our aspirations.

4. Fostering resilience and adaptability: The path to achieving dreams is rarely linear.
Determination equips us with the resilience to bounce back from setbacks and the adaptability to
adjust our course when needed. It allows us to learn from mistakes, refine our strategies, and
keep moving forward despite unforeseen challenges.

5. Inspiring and influencing others: Our determination can be contagious, inspiring and
motivating those around us to pursue their own dreams. This creates a ripple effect, pushing
individuals and communities towards collective progress and the achievement of shared goals.

In summary, determining is essential in the context of our dreams because it involves setting a
clear direction, overcoming challenges with resilience, maintaining focus, making decisive
decisions, putting in consistent effort, adapting to change, and building the confidence needed to
pursue and achieve our aspirations. It is the driving force that propels us to forward on our
journey toward realizing our goals.

Q4) What does this movie reveal regarding the thought process? Explain your thought process.

Ans "The Secret" is a documentary film that popularized the concept of the Law of Attraction.
Released in 2006, it was based on the 2006 film of the same name and the subsequent book by
Rhonda Byrne. The central idea behind the Law of Attraction, as presented in "The Secret," is
that thoughts have a vibrational frequency that attracts similar frequencies from the universe,
influencing a person's reality.

In terms of thought processes, "The Secret" emphasizes several key principles:

Power of Positive Thinking:

"The Secret" advocates for the power of positive thinking. It suggests that maintaining a positive
mindset and focusing on what we want, rather than what we don't want, will attract positive
outcomes.

Visualization:
The film encourages the practice of visualization. This involves creating mental images of the
desired outcomes as a way to attract those outcomes into one's life. The idea is that vividly
imagining success or achieving goals helps align one's energy with those goals.

Affirmations:
Affirmations, or positive statements repeated regularly, are highlighted as a way to reinforce
positive thoughts and beliefs. "The Secret" suggests that affirmations can help reshape our
subconscious mind and influence our behavior and experiences.

Gratitude:
Expressing gratitude for what we have is presented as a key component of attracting more
positive experiences. The film suggests that focusing on gratitude helps shift our energy and
aligns us with abundance.

Law of Attraction:
The core concept of the Law of Attraction is that like attracts like. If we focus on positive
thoughts, we will attract positive experiences, and conversely, negative thoughts will attract
negative experiences.

Now, it's important to note that while "The Secret" gained popularity and has a large following,
the concepts it presents are controversial and not universally accepted. The scientific community
often criticizes the film for lacking empirical evidence and scientific rigor. Many view the Law
of Attraction as more of a philosophical or motivational perspective rather than a scientifically
validated principle.

Q5) Draw the flowchart with short-term goal and long-term goal about your life in accordance
with priorities and wants.

Ans
Q6) How the nudge theory will help you to go towards your oriented goals?

Ans Nudge theory can be a powerful tool to help people move towards their oriented goals, but
it's important to understand its limitations and use it ethically. Here's how it can be helpful:

1. Overcoming cognitive biases: We all have cognitive biases that can lead us to make irrational
choices. Nudges can help us overcome these biases by nudging us towards choices that align
with our long-term goals. For example, if our goal is to save money, automatically setting aside a
portion of our paycheck into savings can help you overcome the present bias, where we tend to
prioritize immediate gratification over future benefits.

2. Making healthy habits easier: Nudges can make it easier to form and stick with healthy habits.
For example, placing healthy snacks at eye level in the fridge while keeping unhealthy ones
hidden can make it more likely you'll choose the healthier option.
3. Increasing motivation and commitment: Nudges can increase our motivation and commitment
to our goals. For example, publicly declaring our goal can make us more accountable and less
likely to give up. Additionally, using progress trackers and rewards can provide positive
reinforcement and keep us on track.

4. Building good habits: Nudges can help build good habits by making them routine and
automatic. For example, setting a reminder to exercise every day or packing our gym bag the
night before can make it more likely you'll we follow through on our workout plan.

5. Encouraging prosocial behavior: Nudge theory can be used to encourage prosocial behavior
that benefits society as a whole. For example, highlighting the positive environmental impact of
using public transportation can nudge people towards more sustainable choices.

However, it's important to remember that:

Nudges should be transparent and ethical. People should understand how and why they are being
nudged and should have the freedom to choose otherwise.

Nudges are not a magic bullet. They work best when combined with other strategies, such as
education and support.

Nudges can backfire. If not designed carefully, they can lead to unintended consequences.

Overall, nudge theory can be a valuable tool for helping people achieve their goals, but it's
important to use it ethically and responsibly.