ECON 101 Lecture Notes - Lecture 16: Discount Window, Loss Aversion, Indifference Curve
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ECON 101 Full Course Notes
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Anchoring valuations depend on reference valuations. Framing consumers react to how information is framed. Loss aversion losses hurt much more than equal gains. Status quo bias people grow to really like what they have, and value things they have more than if they didn"t have them. Habit people buy things out of habit or addiction. Overconfidence people can be overconfident in their abilities or luck . Temptation people often behave inconsistently in the face of temptation, or when others are looking. The slope of the budget line shows tradeoffs. Slope shows the relative price of two goods. Indifference curve a set of bundles that gives the same utility: those that are higher give a higher utility. Downwards sloping: if the quantity of one good is reduced, the quantity of the other good must increase to enjoy the same level of utility.
