Behavioural Economics

question 32

Multiple Choice

Behavioural economics:

• A)brings some of the insights from psychology into the study of economic issues
• B)tends to view human behaviour as less complex than that found in conventional economic theory
• C)applies the tools of economics to understand the functioning of government
• D)includes topics such as adverse selection and moral hazard

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Definitions:

Deindividuation

A psychological state characterized by diminished self-consciousness, reduced social identity, and disinhibited behavior, often occurring in group settings.

Groupthink

A psychological phenomenon that occurs within a group of people when the desire for harmony or conformity in the group results in an irrational or dysfunctional decision-making outcome.

Self-Serving Bias

The common habit of a person taking credit for positive events or outcomes, but blaming outside factors for negative events.

Fundamental Attribution Error

The tendency to overemphasize personal characteristics and ignore situational factors when judging others' behavior.