lecture 7 Flashcards
1
Q
what is bounded rationality?
A
understanding inconsistent or irrational decision-making
2
Q
loss aversion?
A
people perceive losses more strongly then gains
3
Q
expected utility theory?
A
assumes people maximise their utility based on probabilities of outcomes
4
Q
status quo bias?
A
people prefer not to make changes even if they could benefit form them
5
Q
the endowment effect?
A
people value thing their own more then similar items who they do not own
