Behavioural economics Flashcards
1
Q
Anchoring effect
A
The tendency for individuals to place importance on the first piece of information they receive
2
Q
Availability heuristic
A
The tendency for individuals to place importance on information which they can relate to
3
Q
Herding heuristic
A
The tendency for individuals to copy the behaviour and actions of others
4
Q
The paradox of choice
A
The inability of individuals to pick a good when presented with many alternatives compared with only a few alternatives. This is because there exists a higher opportunity cost with many more goods
5
Q
Hot handed/Gamblers fallacy
A
The tendency of individuals to believe unrelated probabilistic events will effect future outcomes
