Home Categories Behavioral Economics Anchoring is a behavioral finance term describing an irrational bias towards an arbitrary benchmark figure. Anchor and Adjust is a cognitive heuristic where a person starts from an initial idea and adjusts their beliefs based on that starting point. Animal spirits come from the Latin spiritus animalis: “breath that awakens the human mind.” It was introduced by the British economist John Maynard Keynes in 1936. The bandwagon effect is when people start doing something because it seems like everyone else is doing it. Barriers to entry describe high start-up costs or other barriers that prevent new competitors from easily entering an industry or area of business. Black Monday refers to the stock market crash that occurred on October 19, 1987, when the Dow Jones Industrial Average lost almost 22% in one day, causing the global stock market to crash. Conflict theory focuses on competition between groups within society for limited resources. Desperate workers are workers who have stopped looking for work because they did not find suitable employment options or were not shortlisted when applying for a job.
The causes of employee frustration are complex and varied. Economic shocks are random, unpredictable events that have a wide impact on the economy and are caused by things that go beyond economic models. The possession effect describes the circumstances under which a person attaches a higher value to an object they already own than the value they would give to that same object if they did not own it.