Behavioural economics starts by watching what people do: The standard model assumes you weigh every option and pick the best one. Watch a real person choose and you see something else: shortcuts, habit, whatever was easiest.
Behavioural economists build that in rather than assuming it away — which is why the subject now borrows openly from psychology instead of arguing with it.
Four things people reliably do
- Losing hurts more than winning pleases. Losing £20 stings more than finding £20 delights.
- The default wins. Whatever box is already ticked is what most people end up with.
- Now beats later. A smaller reward today beats a bigger one next year, far more often than it should.
- Too much choice freezes you. Forty options and many people pick nothing.
A nudge: Ask people to opt IN to a pension and most do not. Enrol them automatically and let them opt OUT, and most stay.
Same choice, same people, same money. Only the default changed.
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The standard model stops at the sale: Dig it up, make it, sell it, bin it. That straight line is what a linear economy does, and the diagram has nothing to say about the bin.
A circular economy is designed so the line bends back on itself.
Linear — a straight line to landfill
- A phone glued shut so the battery cannot be replaced.
- Replaced after three years and thrown out.
- New metals dug up for the next one.
Circular — the material comes back
- Designed to be opened and repaired.
- Resold, refurbished, or stripped for parts.
- The same metals used again.
Why this is an economics question, not a recycling one: The resources a country has are one of its factors of production. Use them once and the curve you drew in 1.1.5 eventually moves inwards.
The economy, society and the environment are not three separate subjects — each one limits the other two. That interdependence is why waste is a production question, not a tidiness one.