After Learning About Behavioral Economics, It Is Clear That

question 22

Multiple Choice

After learning about behavioral economics, it is clear that:

• A) we should dispense with the traditional economic theory.
• B) traditional theory does not explain all consumer decisions, but it sheds light on many of them.
• C) traditional theory would stay but take a second place behind behavioral economics.
• D) including behavioral economics in an economic model would add unnecessary complexity.

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Definitions:

Self-serving Bias

A cognitive bias where individuals attribute positive outcomes to their own actions and negative outcomes to external factors.

Low Productivity

Reduced effectiveness in producing goods or services, often measured by output per labor hour.

Laziness

A lack of willingness or motivation to work or exert effort; often perceived as a negative trait resulting in reduced productivity.

Internal Causes

Factors within a person or organization that influence outcomes, such as attitudes, motivations, or knowledge.