definitions

Question 1

Altruism

Answer 1

humans often behave with more kindness, and fairness if they’re behaving rationally in their own self interest

Question 2

anchoring

Answer 2

The previous price that the person paid for the product, or the first price which they were offered for the product acts as an anchor and affect their consumption decisions in the future

Question 3

availability bias

Answer 3

The human tendency to think that examples of things that can readily to mind are more representative than is actually the case

Question 4

Behavioural economics

Answer 4

Behavioural economics challenges, there is something of pure rationality in our decisions and shows that an individuals economic decisions may be biased

Question 5

behavioural nudge

Answer 5

Aspect of choice architecture that alters peoples behaviour in a predictable way, without changing economic incentives.to count as a nudge The intervention must be easy and cheap to avoid.

Question 6

bias

Answer 6

A systematic nonrandom error in thinking

Question 7

bounded rationality

Answer 7

The idea that the cognitive decision-making capacity of humans cannot be fully rational because of a number of limits that we face

Question 8

bounded self control

Answer 8

Consumers often do not stop consuming, even when it makes sense to stop

Question 9

Choice, architecture

Answer 9

Scenario in which the environment in which someone must make a choice has been carefully designed in order to try and influence the decision

Question 10

Default choice

Answer 10

The default choice is the option that I consumer select, if he or she does nothing

Question 11

framing

Answer 11

Choice can be worded in a way that highlights the positive or negative aspects of the same decision leading to changing in the relative attractiveness

Question 12

Heuristics

Answer 12

Rules of thumb that simplified decisions and represent a process of substituting a difficult question with an easier one

Question 13

loss aversion

Answer 13

Peoples tendency to prefer avoiding losses to acquiring equivalent gains

Question 14

Mandated choice

Answer 14

A situation in which people most of the side in advance, what are they wish to participate in a particular action

Question 15

Marginal utility

Answer 15

Additional satisfaction gain from consuming one extra good or service

Question 16

Rationality

Answer 16

Rational consumers wish to maximise the satisfaction from consumption by correctly, choosing how to spend the limited income

Question 17

restricted choice

Answer 17

Restricting the number of available choices may be more likely to cause consumers to act and actually make a decision

Question 18

Social norms bias

Answer 18

Our day-to-day behaviour is influenced strongly by what we understand to be the social norms. Social norms becomes accepted by the majority of a given community of people.