ECON 20 Chapter Notes - Chapter 8: Procrastination, Chocolate Cake, Odysseus
3 Dec 2020
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Behavioral economics: a field of economics that draws on insights from psychology to expand models of individual decision making. Example: you wake up one saturday morning with great intentions to have a useful and productive day work out, clean the apartment, study. Later, you realize that, somehow, it"s saturday evening and you"re still in your pajamas watching reruns of dragon"s den. How did that happen: revealed preference that is, no matter what you had thought you wanted to do, your actions reveal that what you actually wanted to do was to spend the day watching tv. Another way to look at it is to consider that you simply weren"t acting rationally. Many of us have experienced feelings of conflict when we know we want to do one thing, but find ourselves constantly doing another: we want to study but instead we play video games. Saying that our actions must reveal our true desires goes against our understanding of ourselves.
