Asked by

Daman Dhaliwal
on Nov 25, 2024

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According to behavioral economics, cognitive biases

A) create errors in decision making, but these errors are random and follow no particular pattern.
B) occur but are not prevalent enough to distort the behavioral predictions of neoclassical economics.
C) are misunderstandings or misperceptions that cause systematic error.
D) are solely the result of faulty heuristics.

Cognitive Biases

Systematic patterns of deviation from norm or rationality in judgment, whereby individuals create their own "subjective social reality."

Behavioral Economics

A field that combines insights from psychology and economics to explore how people make decisions, often deviating from the assumptions of traditional economic theory.

Neoclassical Economics

An economic approach that analyzes market mechanisms and the allocation of resources through supply and demand, focusing on rational choices and equilibrium.

  • Review the impact of cognitive biases on personal and financial decisions.
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Muhammad Hafiez Daniel Bin Ahmad Azmi | TOC STUDENTNov 27, 2024
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