Posts Tagged ‘bias’

Behavioral Economics: Prospect Theory

One of the most well-known economic theory papers is Prospect Theory, written by Kahneman and Tversky. Prospect Theory discusses how people violate Expected Utility Theory by valuing gains and losses differently from one another Before we get into Prospect Theory (PT), here’s a little background on Expected Utility Theory (EUT). EUT discusses how a decision […]

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Behavioral Economics: Our Decision-Making is Flawed

This is week two of my behavioral economics crash-course, where I’ll be giving a general overview of a few effects and biases that cause people to act irrationally. There’s so many more, some we’ll get to in later weeks, but these are just a few to get us started. Endowment Effect The endowment effect is […]

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