What is Habits In Behavioral Economics?

What is a habit?

A habit is a regular practice or tendency that an individual performs subconsciously or automatically, usually acquired through frequent repetition. In behavioral science, the term is often analyzed to understand how such automatic behaviors form and can be changed. Habits can be both beneficial, such as exercise or healthy eating, and detrimental, like smoking or procrastination.

Historical Context

The study of habits can be traced back to early psychological theories, such as classical and operant conditioning developed by Ivan Pavlov and B.F. Skinner, respectively. Over the years, the understanding of habits has evolved from a simplistic stimulus-response mechanism to a more complex interplay of psychological, neurological, and social factors.

Formation of Habits

Habits form through a cyclical process often described as the “habit loop,” consisting of three main components: cue, routine, and reward. This loop is a neurological pattern that governs any habit and can be understood as follows:

  • Cue

    The cue triggers the habit loop. It is the event that initiates the behavioral sequence. This could be an emotional state, a time of day, or a specific situation.

  • Routine

    The routine is the behavior itself. Once triggered by the cue, this is the automatic response or series of actions performed.

  • Reward

    The reward is the positive reinforcement that follows the routine, cementing it as a habit. Over time, the brain starts associating the cue and the reward, making the routine more automatic.

Breaking and Changing Habits

Modifying habits is challenging but achievable through the manipulation of the habit loop components. The key is to identify the cue and substitute a new routine that provides a similar reward. This approach often involves:

  • Identifying Triggers

    The first step in breaking a habit is understanding what triggers it. This can often be discerned by keeping a habit journal.

  • Substituting Behavior

    Once the cue is identified, the next step is to substitute the routine with a new, more desirable behavior that leads to a similar reward.

  • Reinforcement

    Consistent reinforcement of the new routine through rewards is crucial for making the change stick.

Psychological and Neurological Mechanisms

The neural substrate of habits lies primarily in the basal ganglia, a complex of nuclei in the brain responsible for various cognitive and motor functions. The neurotransmitter dopamine plays a critical role in habit formation, acting as the ‘reward molecule.’

Dopamine and Reward

Dopamine is often released upon the completion of a routine, reinforcing the habit loop. In this way, dopamine acts as the neurological ‘glue’ that helps to cement habits.

Role in Society and Culture

Habits significantly influence collective behavior and are a topic of study in sociology and anthropology. Cultural norms, ethical standards, and social structures are often established and maintained through collective habits. The study of habits in these contexts is crucial for understanding social cohesion and change.

Applications in Behavioral Interventions

Understanding the psychology of habit formation and modification is essential for behavioral interventions. Techniques like Cognitive Behavioral Therapy (CBT) employ a deep understanding of habits to help individuals change undesired behaviors and develop healthier routines.


Habits are deeply ingrained behavioral patterns that govern a significant portion of human life. They are formed through a cyclical process involving a cue, routine, and reward and can be modified through a similar mechanism. The study of habits spans multiple disciplines, including psychology, neuroscience, sociology, and behavioral science. It has essential applications in individual behavior change and broader social contexts.

Related Articles

Default Nudges: Fake Behavior Change

Default Nudges: Fake Behavior Change

Read Article →
​Here's Why the Loop is Stupid

​Here’s Why the Loop is Stupid

Read Article →
How behavioral science can be used to build the perfect brand

How behavioral science can be used to build the perfect brand

Read Article →
The death of behavioral economics

The Death Of Behavioral Economics

Read Article →