Management MGT 100 Lecture Notes - Lecture 12: Public Knowledge, Peer Pressure, Ultimatum Game
18 Aug 2016
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Document Summary
Behavioral economics: the subfield of economics that integrates the insights of psychology. Herbert simon suggested that humans should be viewed as satisficers. Rather than always choosing the best course of action, they make decisions that are merely good enough. Most people are too sure of their own abilities. People give too much weight to a small number of vivid observations. For example, will take friend"s testimony at greater weight than a study. People interpret evidence to confirm beliefs they already hold. Faced with the prospect of doing a task immediately, people normally choose to put it off even if it means taking longer time in the future. Humans are easily influenced by the statements and deeds of others. People are more likely to conform when they know other people will see what they have to say. Collective conservatism: the tendency of groups to stick to established patterns even as new needs arise.
