Behavioral economics (2).pptx - Economics Behavioral...

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Economics/ Behavioral Economics Status Quo/ Default Option Rationing # of Choices Endowment Effect “Free” Price Endings Price Elasticity
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Behavioral Economics The book is not that great; focus on Table 8.1 and focus on this Power Point deck
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Spock https://
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Vulcans Vulcans = Emotionless, Deliberative Thinkers Product Informatio n Utility gained from the product Utility lost by paying the price Purchase Decision Utility Maximizat ion
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Behavioral Economics vs. Neoclassical Economics (Vulcans) LO1
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LO3
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LO3 Opt-in Opt-out Status Quo Bias
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Unintended consequences Insert France, 100% donor Insert organ donor/ driverless cars
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https://
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Governments are taking note The Behavioural Insights Team ( BIT ), also known unofficially as the " Nudge Unit ", is an organization that was set up by the UK government in 2010 to apply nudge theory (behavioural economics and psychology) to try to improve government policy…. In 2015, President Barack Obama issued an executive order formally establishing the White House Social and Behavioral Sciences Team ….. …..concern about the goals of government nudging and the oversight of experiments. Are they really trying to improve our government and lives? Or are they manipulating us to do whatever Uncle Sam wants? - Forbes magazine
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Behavioral Economics
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Economics/ Behavioral Economics Status Quo/ Default Option Rationing # of Choices Endowment Effect “Free” Price Endings Price Elasticity
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~ 300% expensive!
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Customers are Willing to Pay for Portion Control © Manoj Thomas, All Rights Reserved 17
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Economics/ Behavioral Economics Status Quo/ Default Option Rationing # of Choices Endowment Effect “Free” Price Endings Price Elasticity
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Choice variety in standard economics Good
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Choice variety in standard economics Better
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