1.3 Aspects of behavioural economic theory Flashcards
What is bounded rationality?
The mind has only a limited ability to process and evaluate information
The available information is incomplete and often unreliable
What is bounded self-control?
Individuals lack the self control to act in what they see as self interest
What are rules of thumb?
thinking shortcuts individuals use to make decisions
What is anchoring?
People making decisions heavily on the first piece of information when making judgement
What is availability bias?
Someone makes a judgement about the likelihood of future events happening
What are social norms?
The influence others have on your decision making
What is alturism?
The concern to the welfare of others
What is fairness?
The quality of being impartial and free of favoritism
What is nudge theory?
Nudge theory is an attempt to manipulate social norms through positive reinforcement in a non-coercive manner
What is shove theory?
Shove policies instruct people to behave in certain ways
Often using financial incentives to reward or punish different decisions
