10 things to know about behavioural economics

What is the second aspect of "behavioural economics"?

• bounded rationality

• social preferences

• social learning

• individual differences

Answer explanation

1. Humans are social animals and care about fairness and inequality, influencing their economic decisions.

What is the third aspect of "behavioural economics"?

• social learning

• heuristics and biases

• present bias

• individual differences

Answer explanation

People often follow the behavior of others, assuming the crowd knows something they don’t.

What is the fourth aspect of "behavioural economics"?

• quick decision-making

• intrinsic vs. extrinsic motivation

• heuristics and biases

• present bias

Answer explanation

People are motivated by more than just money (extrinsic) ; intrinsic motivations like pride and the desire to do a good job are significant.

How would you name the fifth aspect of "behavioural economics"?

Answer explanation

In reality, people often make decisions quickly due to constraints and the overwhelming amount of information.

What is the sixth aspect of "behavioural economics"?

• behavioural macroeconomics

• present bias

• policy application

• heuristics and biases

Answer explanation

Quick thinking involves using heuristics or rules of thumb*, which can lead to mistakes, especially in risky situations.

_{*rule of thumb = general indication, rule}

What are the two words you have just heard could summarise aspect n°7 ?

Answer explanation

People tend to be disproportionately impatient in the short term, affecting their forward planning.

This is a summary of aspect n°8 - Fill in the blank
Personality, _______, and emotions play a crucial role in decision-making, which standard economics often overlooks.

What is the ninth aspect?

• behavioural macroeconomics

• behavioural microeconomics

• behavioural economics

• standard economics

Answer explanation

Capturing macroeconomic behavior is challenging because people are interdependent and different, complicating aggregation.

What is the last most important aspect of "behavioural economics"?

• policymakers

• public policies

• policy applications

• social policy

Answer explanation

Behavioral economics is useful for policymakers, who can use nudges to influence behavior effectively.