Behavioral vs Neoclassical Flashcards
Rationality neoclassical
people are fundamentally rational and will adjust their choices and behavior to achieve their goals
Rationality Behavioral
people are irrational and make many errors that reduce their chances of achieving their goals, regularly repeated systematic errors
Stability of preferences Neoclassical
people preferences are completely stable and unaffected by context
Stability of preferences Behavioral
peoples preferences are unstable and often inconsistent because they depend on context (framing effects)
Mental calculations Neoclassical
people are eager and accurate calculators
Mental calculations Behavioral
people are bad at math and avoid difficult computations if possible
Asses the future Neoclassical
People are just as good at assessing future options as current options.
Assess the future Behavioral
People place insufficient weight on future events and outcomes.
Strength of willpower Neoclassical
People have no trouble resisting temptation.
Strength of willpower Behavioral
People lack sufficient willpower and often fall prey to temptation.
Degree of selfishness Neoclassical
People are almost entirely self-interested and self-centered.
Degree of selfishness Behavioral
People are often selfless and generous.
Fairness Neoclassical
People do not care about fairness and only treat others well if doing so will get them something they want
Fairness Behavioral
Many people care deeply about fairness and will often help others even when doing so will yield no personal benefits.
