ECON 2106 Study Guide - Quiz Guide: Hot-Hand Fallacy, Status Quo Bias, Ultimatum Game
14 Mar 2018
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Document Summary
Behavioral economics - the field of economics that draws on insights from experimental psychology to explore how people make economic decisions. Bounded rationality - (also called limited reasoning) proposes that although decision-makers want a good outcome, either they are not capable of performing the problem solving that traditional economic theory assumes or they are not inclined to do so. Gam(cid:271)ler"s falla(cid:272)y - the belief that recent outcomes are unlikely to be repeated and that outcomes that have not occurred recently are due to happen soon. Hot hand fallacy - the belief that random sequences exhibit a positive correlation (relationship) Framing effect - occurs when people change their answer depending on how the question is asked (or change their decision depending on how alternatives are presented) Priming effect - occurs when the order of the questions influences the answers. Status quo bias - exists when decision-makers want to maintain their current choices.
