Behavioural Economics Flashcards
1
Q
Prospect theory
A
Theory that people are very sensitive to small losses from current wealth
2
Q
Framing effect
A
Same choice presented in 2 diff ways leads to diff decisions
3
Q
Departures from full rationality = classified in 3 ways
A
1) cognitive ability
2) limits to willpower
3) limits to self interest
4
Q
Behavioural economics
A
= study of economic behaviour that departs from full rationality
