Exam 10: An Introduction to Behavioral Economics

In traditional economic models, homo economicus refers to a decision maker who:

If a Proposer and a Responder are asked to split $100 in the ultimatum bargaining game, standard economic theory would predict that the Proposer should offer the Responder:

Rules of thumb that reduce computation costs are known as:

Suppose Chelsea reads two news articles about future house prices. The first article predicts that house prices will fall next month, and the second predicts that house prices will rise next month. Valerie reads the same two articles, but she first reads the one that predicts that house prices will rise, and then reads the one that predicts that house prices will fall. If Chelsea and Valerie know very little about future house prices, and each uses anchoring and adjustment to form her assessment, then, all else equal, which of them is more likely to think that house prices will rise next month?

The ________ accommodates a much broader range of observed behavior than traditional economic models, but has been criticized because virtually any bizarre behavior can be explained by assuming people have a sufficiently strong taste for it.

Suppose Anna just received a parking ticket. According to the availability heuristic, this will tend to make Anna:

In traditional economic models, homo economicus is assumed to be all of the following EXCEPT:

The decision-making strategy that aims for adequate results because optimal results may necessitate excessive expenditure of resources is known as:

According to the adaptive rationality standard, people might choose to have unselfish preferences because:

Consider two coupons: one offers 50 percent off a scarf that costs $20, and the other offers 5 percent off a jacket that costs $200. Using either coupon requires driving to the shopping mall across town. According to the Weber-Fechner law, which coupon will people tend to perceive as being more valuable?

In traditional economic models, the narrowly self-interested, well-informed, highly disciplined and cognitively formidable decision maker is often referred to as:

Laws restricting gambling can be seen as an attempt to limit the consequences of:

Homo economicus is all of the following EXCEPT:

When researchers compare people who are asked to imagine that, having previously purchased a ticket for $10, they arrive at the theater to discover they have lost their ticket to people who are asked to imagine that they arrive just before the performance to buy a ticket and find they have lost $10 from their wallets, which group is more likely to say that they would still attend the performance?

The ________ is a rule of thumb that estimates the frequency of an event by the ease with which it is possible to summon examples from memory.

According to the representative heuristic, you are more likely to assume that someone you just met is an architect if:

Suppose Michael is willing to drive across town to save 40 percent on a sweatshirt with a list price of $80. If Michael is rational, this implies that he should

In the realm of public policy, loss aversion makes it:

In traditional economic models, people:

Regression to the mean refers to the phenomenon in which unusual events are: