Individual Economic Decision Making Flashcards
Define Bounded Rationality
When people try to behave rationally but cannot, due to imperfect information
Define Bounded Self Control
When individuals have good intentions but lack self-discipline to complete
Define Rule of Thumb
Short-cuts in thinking used to save time and effort
Define Anchoring
Individuals relying on particular pieces of information when making decisions
Define Availability Bias
Judgements made based on recent events
What effect does social norms have on decision making
The influence from others
Define Altruism
Motivated to do the right thing
What is Choice Architechture?
Influencing consumer choices by the presentation of the options
What is Framing?
Influencing choices by the way numbers and words are used
What are Nudges?
Influencing consumer choices with gentle suggestions and positive reinforcement
What are Default Choices?
Influencing behaviour by setting socially desirable choices as default
What are Mandated Choices?
Where people are legally required to make a particular choice
What is a Restricted Choice?
Giving consumers a limited number of options when making a choice
