Behavioural economics changed how we understand human choice. Hussam Ghazzawi, Co-Founder of AnaAkhtar, looks at what it reveals about the decisions students make every day, and why practising those decisions matters.
For much of the last century, economics rested on a convenient character. He weighed every option, knew exactly what he wanted and always chose whatever served him best. Economists called him homo economicus, the rational economic man.
Anyone who has spent an evening with a fourteen-year-old the night before an exam knows he does not exist. The student knows revising is the sensible choice. The phone is closer.
That gap between knowing the right choice and making it is, to my mind, one of the most useful ideas economics has given education. It is also exactly where social, emotional and behavioural skills do their work.
How economics discovered the human being
An influential challenge came from Herbert Simon. In 1955 he argued that real people do not have the time, information or mental capacity to find the perfect choice. They look for one that is good enough and stop there [1]. The idea became known as bounded rationality, and Simon received the Nobel Prize in Economic Sciences in 1978.
In 1979, the psychologists Daniel Kahneman and Amos Tversky went further. Their prospect theory showed that people do not judge outcomes in absolute terms. They judge them as gains or losses from where they stand, and a loss weighs more heavily than a gain of the same size [2]. Kahneman received the Nobel Prize in Economic Sciences in 2002.
In 2017 the prize went to Richard Thaler. The Nobel committee credited him with showing how limited rationality, social preferences and lack of self-control systematically affect individual decisions as well as market outcomes [3].
Read that list again with a school in mind. Limited rationality, social preferences, lack of self-control. It could almost describe a Grade 8 corridor between lessons.
Three ideas every teacher will recognise
Present bias. People give far more weight to how they feel now than to what they will gain later. A student who skips revision is rarely short of information about exams. The reward is simply too far away to compete with the moment. Learning to hold the longer view is a large part of what we call self-management.
Loss aversion. Because losses hurt more than equal gains please us, people go to surprising lengths to avoid them. For a teenager, one of the biggest losses is losing face. It is why an apology can feel impossible even when a student knows they were wrong, and why someone stays quiet rather than defend a classmate and risk their own standing.
Social preferences. People care about fairness and about how others see them, not only about their own gain, and Thaler’s research on fairness helped bring this into economics [3]. In a school, the question ‘what will they think?’ shapes more decisions than any rulebook. Across the MENA region, where family and community ties are close, that question often carries the voices of home as well.
These are not flaws in particular students. They are patterns in all of us, and patterns that are predictable can also be worked with.
Fast moments need slow practice
Kahneman later described two modes of thinking. One is fast, automatic and emotional. The other is slow, deliberate and effortful [4]. Most social moments in school happen at the fast speed. A comment is made, a group turns away, a friend looks upset. There is rarely time to sit and weigh the options.
For me, the interesting question is what happens when we take this understanding of human behaviour into the world of education. Students can explore a decision before they face something similar in real life: pause at the moment of choice, consider different responses and reflect afterwards, with no audience and no pressure. Repeated opportunities like these may help students bring a more thoughtful approach to the fast moments when they come.
The economic case for these skills
Economists have also tried to measure what these skills are worth across a lifetime. A study published in 2011 followed 1,000 children in Dunedin, New Zealand, from birth to age 32. Children with lower self-control in childhood went on to have poorer physical health and more difficulty managing money as adults, and the pattern held regardless of their IQ or family background [5]. It was an observational study, so it shows a strong link rather than proof that any one programme changes those outcomes.
James Heckman, who received the Nobel Prize in Economic Sciences in 2000, reviewed the wider evidence with Tim Kautz in 2012. They concluded that achievement tests miss much of what predicts success in life, and that skills such as perseverance, self-control and sociability matter in their own right and can be strengthened [6].
When a team led by the economist Clive Belfield carried out a benefit-cost analysis of four selected school social and emotional learning programmes, they found that the benefits substantially outweighed the costs [7]. For ministries and school networks, this adds an economic perspective to the educational case for developing social and emotional skills. The findings are promising, although the benefits depend on the programme, how well it is implemented and which outcomes are measured.
From understanding choices to practising them
This thinking influenced how we built AnaAkhtar. We wanted students to have opportunities to explore choices before facing similar situations in real life, to reflect on their decisions and to return to those skills over time. Not because every choice will be right, but because learning to pause and think is itself a skill worth developing.
The rational student, revisited
Economics gave up on the perfectly rational person decades ago, and it became a better discipline for it. Education can take the same lesson. The fourteen-year-old with the phone will never become homo economicus, and nobody should want them to. The aim is a student who has met enough choices, and thought about them honestly enough, that the next one comes a little easier.
About the author
Research & References
Selected research and practical guidance for educators. Numbered references correspond to citations in the article.
1. Simon (1955): Quarterly Journal of Economics
“A Behavioral Model of Rational Choice”, the foundation of bounded rationality. Read source
2. Kahneman & Tversky (1979): Econometrica
“Prospect Theory: An Analysis of Decision under Risk”. Read source
3. The Nobel Prize: Richard H. Thaler (2017)
Press release on his contributions to behavioural economics. Read source
4. Kahneman (2011): Thinking, Fast and Slow
Farrar, Straus and Giroux. Fast and slow modes of thinking. Read source
5. Moffitt et al. (2011): Proceedings of the National Academy of Sciences
“A gradient of childhood self-control predicts health, wealth, and public safety”. Read source
6. Heckman & Kautz (2012): Labour Economics
“Hard Evidence on Soft Skills”. Read source
7. Belfield et al. (2015): Journal of Benefit-Cost Analysis
“The Economic Value of Social and Emotional Learning”. Read source
By: AnaAkhtar | © 2026 AnaAkhtar FZC-LLC. All rights reserved.
