Chapter 8 - Behavioral Economics: A Closer Look at Decision Making Flashcards
1
Q
Behavioral economics
A
A field of economics that draws on insights from psychology to expand models of individual decision making
2
Q
Time inconsistency
A
A situation in which we change our minds about we want simply because of the timing of the decision
3
Q
Commitment device
A
a mechanism that allows people to voluntarily restrict their choices in order to make it easier to stick to plans
4
Q
Sunk cost
A
a cost that has already been incurred and cannot be refunded or recovered
5
Q
fungible
A
easily exchangeable or substitutable
