PSYC 180 Chapter Notes -Online Dating Service, Ikea, Lake Wobegon
8 May 2012
School
Department
Course
Professor
Document Summary
Behavioural economics, aka judgement and decision making (jdm) In economics, rationality provides the foundation for economic theories, predictions, and recommendations. The truth about relativity (why everything is relative, even when it shouldn"t be) Humans rarely choose things in absolute terms. Rather, we focus on the relative advantage of one thing over another, and estimate values accordingly. We not only tend to compare things with one another but also tend to focus on comparing things that are easily comparable and avoid comparing things that cannot be compared easily. We can control the circles around us, moving towards smaller circles that boost our relative happiness. We can also change our focus from narrow to broad. The more we have, the more we want. The only cure is to break the cycle of relativity. The fallacy of supply and demand (why prices are up in the air)
