Asked by Yocabed Efrem on Jun 25, 2024
Verified
Neoclassical economics and behavioral economics both recognize that people make errors in their decision making.
Decision Making
The process of selecting among alternatives to achieve a goal or solve a problem.
- Acquire knowledge of the essential theories of behavioral economics and observe how they diverge from neoclassical economics.
- Pinpoint various mental shortcuts and their role in the process of economic decision-making.
Verified Answer
BS
Black ShadowJun 30, 2024
Final Answer :
True
Explanation :
Neoclassical economics assumes rational decision-making but recognizes that errors can occur due to lack of information or computational complexity. Behavioral economics, on the other hand, directly studies the impact of psychological, cognitive, emotional, cultural, and social factors on the economic decisions of individuals and institutions, highlighting how they can lead to systematic errors in judgment and decision-making.
Learning Objectives
- Acquire knowledge of the essential theories of behavioral economics and observe how they diverge from neoclassical economics.
- Pinpoint various mental shortcuts and their role in the process of economic decision-making.
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