Fitch%20-%20Class9%20F10-%20Behavioural%20Economics%20II

Fitch%20-%20Class9%20F10-%20Behavioural%20Economics%20II -...

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emand Fall 2010 UGBA101A-03 Microeconomic Analysis for Slide 1 Chapter 4 Individual and Market De Business Decisions Class 9 Prof. Todd Fitch
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emand Why Study This? – Because knowing how consumers think can lead us to develop • Better regulations to help consumers • Encourage the behavior we want to see (note that this is often a values judgment – while forcing people to save Slide 2 Chapter 4 Individual and Market De seems to be a “good” thing, people who want to make their own choices feel this is intrusive government intervention. What if the full cost of the consumer’s choice is borne by the consumer? What if it isn’t? - think about healthcare and emergency rooms.) – Because we can analyze market failures – why make a run on the bank when your deposits are insured by the FDIC?
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Heuristics: “rules of thumb we use to make judgments about the world” Slide 3 Chapter 4 Individual and Market De • To what extent do these heuristics bias our decisions? • “Linda”
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Fitch%20-%20Class9%20F10-%20Behavioural%20Economics%20II -...

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