Behavioural Economics Flashcards
1
Q
What are the 4 decision making biases ?
A
Heuristics
Anchoring
Availability bias
Social Norms
2
Q
Heuristics
A
(Rule of thumb) or a (mental shortcut)
Making decision’s almost without thinking at all
Whereas the latter indicates a more deliberate process
Eg five a day
3
Q
Anchoring
A
The human tendency to rely on the the first piece of information they are given
Eg first price negotiation or sale prices
As the first piece of information causes consumers to have a bias towards it when is subsequent information is given
4
Q
Availability bias
A
A form of bias towards events that were recent
Eg a fall in demand for air travel following a plane crash
5
Q
Social norms
A
Following what other people do what is is customary to society
