What Is Cognitive Dissonance In Behavioral Economics?

Cognitive dissonance is a psychological phenomenon that occurs when people hold two or more conflicting beliefs, ideas, or values at the same time. This can cause discomfort or stress, and people will often try to reduce this dissonance by changing their beliefs or behaviors. For example, if someone values honesty but also tells a lie, they may experience cognitive dissonance and may try to rationalize their behavior by convincing themselves that the lie was justified. Cognitive dissonance can influence people’s behavior and decision-making, and it is an important concept in psychology and behavioral economics. Understanding and addressing cognitive dissonance can help people to make more consistent and rational decisions.

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