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Cindy Saucedo
on Nov 25, 2024

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According to behavioral economics, temptation to make harmful decisions can be overcome by presenting decision makers with better information and more options.

Behavioral Economics

The branch of economic theory that combines insights from economics, psychology, and biology to make more accurate predictions about human behavior than conventional neoclassical economics, which is hampered by its core assumptions that people are fundamentally rational and almost entirely self-interested. Behavioral economics can explain framing effects, anchoring, mental accounting, the endowment effect, status quo bias, time inconsistency, and loss aversion.

Harmful Decisions

Choices made by individuals or entities that result in negative consequences or damage.

  • Understand the basic principles of behavioral economics and how they differ from neoclassical economics.
  • Acknowledge the influence of context on preferences and decisions in behavioral economics.
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stela breguNov 29, 2024
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