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Behavioral Economics/Finance is a somewhat depressing field as it shows that humans make bad decisions often...

Behavioral Economics/Finance is a somewhat depressing field as it shows that humans make bad decisions often and over and over again. However, what it the silver lining (free lunch) from studying behavioral economics/finance. Explain.

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Ans: In Behavioral Economics, we study the principles behind the psychology of money and one of them is this so called free.

Free lunch is the invisible price that we pay using our time, effort, attention, information, hope, and in some cases even money.

But free is such a powerful marketing tool even for those who can easily afford to buy things. The price of zero is psychologically much more attractive than any other price. It makes one feel that there is no downside because you didn’t pay anything. It makes one to go to a restaurant, fall in line for hours, listen to sales pitches, give one's information and even pay for something he did’t need in order to get something else for free.

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