Asked by
Verified
When people react to (or perceive) identical situations differently in different contexts, behavioral economists refer to that as the
A) planning fallacy.
B) framing effect.
C) confirmation bias.
D) availability heuristic.
Framing Effect
A cognitive bias in which the way information is presented affects decision-making or judgments, leading individuals to alter their interpretation based on the "frame" of reference.
Identical Situations
Circumstances or scenarios where all relevant factors and conditions are exactly the same for all parties involved.
Different Contexts
The varying situations, circumstances, or environments in which a concept or term can be applied or understood.
- Gain insight into the basic tenets of prospect theory, including the significance of loss aversion and the framing effect in economic decision-making.
Verified Answer
Learning Objectives
- Gain insight into the basic tenets of prospect theory, including the significance of loss aversion and the framing effect in economic decision-making.
Related questions
When Economists Talk About a New Normal in Terms of ...
According to Prospect Theory, What Strategy Will Firms Typically Employ ...
According to Prospect Theory, Firms Are More Likely to Shrink ...
Suppose That Dairy Barn Foods Produces a Regular Sour Cream ...
Which of the Following Is a Key Part to the ...