Behavioral models 

are models of the dynamic behavior of the system as it is executing. They

show what happens or what is supposed to happen when a system responds to a stimulus from
its environment. You can think of these stimuli as being of two types: Data. Some data arrives
that has to be processed by the system.

What is behavioral modeling with example?

For example, a credit card company will examine the types of businesses that a card is
normally used at, the location of stores, the frequency and amount of each purchase to
estimate both future purchase behavior, and whether a cardholder is likely to run into
repayment problems.

What is Behavioral Modeling?

Behavioral modeling is an approach used by companies to better understand and
predict consumer actions. Behavioral modeling uses available consumer and
business spending data to estimate future behavior in specific circumstances.
Behavioral modeling is used by financial institutions to estimate the risk
associated with providing funds to an individual or business and by marketing
firms to target advertising. Behavioral economics also relies on behavioral
modeling to predict behaviors of agents that fall outside of what would be
considered entirely fact-based or rational behavior.

KEY TAKEAWAYS

 Behavioral modeling attempts to explain why an individual makes a

decisions and the model is then used to help predict future behavior.
 Companies use behavioral modeling to target offers and advertising to
customers. Banks also use behavioral modeling to create deeper risk
profiles of customer groups.
 Behavioral modeling mainly uses a company's dataset, but it may also pull
in other relevant, public sources.