PUBHLTH 139 Lecture Notes - Lecture 7: Rationality, Patient Protection And Affordable Care Act, Moral Hazard

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Rational choice theory- people weight the costs and benefits to make decisions. A theoretical model of how public policy decisions are (or perhaps ought to be) taken. All possible options or approaches to solving the problem under study are identified and the costs and benefits of each option are assessed and compared with each other. The option that promises to yield the greatest net benefit is selected. The main problem with rational- comprehensive approaches is that it is often very costly in terms of time and other resources that must be devoted to gathering the relevant information. Often the costs and benefits of the various options are very uncertain and difficult to quantify for rigorous comparison. The costs of undertaking rational-comprehensive decision-making may themselves exceed the benefits to be gained in improved quality of decisions. Utility maximization- - effort to maximize use by putting stars by questions that are most likely to be on the test.

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