Shash DholakiaECO 3413/23/14Final PaperIn this paper I aim to link behavioral economics concepts to health economics issues. The goal is to use economics and psychology to explain how patients or doctors deviate from the assumptions of standard economic theory. In it through behavioral economic concepts that help researchers analyze and predict patient or doctor behavior. Behavioral economics has numerous applications in medical care, and these ideas can be used to create better health outcomes and stronger policies. I will look at the economic issue of information asymmetry in some healthcare spaces. According to standard economic theory, decision makers are fully informed and have rational preferences with the goal of maximizing utility. The behavioral economics literature examines patient and physician decision making through a variety of lenses, such as the concepts of radical uncertainty and visceral factors. Through research and observation it is only “rational” to apply the concepts of behavioral economics. In this industry uncertainty hovers over every decision where patients have limited information influencing decisions in an environment of fear, make choices in a context of fear and trust in the doctor. Every situation in the medical field is unique and this creates many uncertainties. These uncertainties can influence decisions regarding diagnosis, treatment, and prognosis. Since this is a very broad topic, I will narrow it down to a few topics to explain the ideas. I will try to demonstrate the decision-making capacity of the patient and doctor in risk situations and use the example of end-of-life care to make the topic tangible. I'll start by giving an overview... middle of the paper... .d treatment is difficult to understand under such stress. This statistic shows the amount of uncertainty there is in such a complex situation. In the case of lung cancer, decision makers cannot be sure whether the drugs will improve life or have side effects. The only information he has is statistical evidence from previous cases. This is an inefficient way of making decisions because every case in medicine is unique. Furthermore, in the case of terminal lung cancer you can't be sure whether radiation or surgery will make your life better or worse. Making decisions under conditions of radical uncertainty with risk information is a process worth analyzing. Every decision maker is different and it is important to understand how people make decisions under uncertainty because risks do not exist in a vacuum. Risk choices are susceptible to human response to fear.