#1
Who is known for proposing Prospect Theory?
Daniel Kahneman and Amos Tversky
ExplanationFormulated by Kahneman and Tversky, explains decision-making under uncertainty.
#2
Who introduced the concept of 'nudge' in behavioral economics?
Richard Thaler
ExplanationThaler's concept of guiding choices without restricting options.
#3
Which concept suggests that individuals tend to prefer immediate rewards over larger future rewards?
Hyperbolic discounting
ExplanationPreference for immediate rewards despite greater future gains.
#4
Which cognitive bias refers to the tendency to rely too heavily on the first piece of information encountered?
Anchoring bias
ExplanationOveremphasis on initial information affecting decision-making.
#5
Which behavioral economics concept describes the tendency for people to make decisions based on an emotionally charged frame of reference?
Framing effect
ExplanationDecisions influenced by emotionally framed information.
#6
What is the endowment effect in behavioral economics?
The tendency to overvalue items one owns
ExplanationOvervaluing owned items compared to their market value.
#7
Which psychological phenomenon refers to the tendency for individuals to overestimate the likelihood of rare and memorable events?
The availability heuristic
ExplanationOverestimating rare events based on vividness and memorability.
#8
Which theory suggests that individuals often make decisions based on the potential value of losses and gains rather than the final outcome?
Prospect theory
ExplanationDecision-making based on perceived value of losses and gains.
#9
What does 'loss aversion' suggest?
People prefer avoiding losses more than acquiring equivalent gains
ExplanationTendency to value avoiding losses more than gaining equivalent benefits.
#10
In behavioral economics, what does 'bounded rationality' suggest?
People's rationality is limited by cognitive constraints
ExplanationLimitations on rational decision-making due to cognitive constraints.
#11
In behavioral economics, what does 'regret aversion' suggest?
People are more afraid of making wrong decisions than missing opportunities
ExplanationFear of making incorrect decisions over missing opportunities.