ECON 142 Lecture Notes - Lecture 16: Bounded Set, Behavioral Economics, Observational Error
21 Jun 2020
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From thaler, et al (2018) our analysis has focused on sports for several reasons. First, these sorts of decisions occur frequently and so coaches have their opp to. Get it right and recognize which choices maximize their chances of winning. A failure to maximize here, then, says something about the psychology of the decision maker and cannot be sloughed off as a result of insufficient opp to learn. Second, there is a lot at stake in sports decisions and coaches have very incentive to get it right. Coacheses in professional sports lose their jobs a lot more often than other high level managers do, and they generally do so for one reason that better decision making could combat - they do not win often enough. Homo economics - theory of rational choice. The traditional model of economic behavior is restrictive in a number of ways. Economic agents are assumed to be perfectly rational.
