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Flashcards in Behavioural Economics Deck (1)
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1
Q

Define behavioural economics

A

Classical economics are based on the assumption that humans behave rationally in all decisions. That they will always choose the route of best outcome in every decision. Economists use this to assumption to create mathematical models which predict how people and whole economies will behave. Behavioural economics looks at psychological and social factors neglected by classic economics to more accurately predict human behaviour.