An economy where government officials allocate economic resources to firms / productive enterprises ( government control the supply produced and what is produced )
A mix of different types of economic systems. They contain a large market sector and large non - market sector in which the planning mechanism operates.
Assumes that people do not always act in a rational way, they decisions are influenced by their emotions, social norms and cognitive biases ( mental thinking )
The tendency to seek only information that matches what one already believes
rule of thumb
thinking shortcuts or informed guesses that individuals use to make decisions in order to save time and effort
availability bias
when individuals place too much weight on the probability of an event happening because that can recall vivid examples of similar events. this leads to decisions that are not based on logical reasoning
Anchoring bias
People are more likely to pick the middle priced item, when comparing the item with competitors, believing it is not too expensive or cheap.
Social norms
Forms or patterns of behaviour considered acceptable by a society or group within that society
nudges
factors which convince people to think in certain ways
economic sanctions
they restrict an individuals freedom to behave in certain ways through punishment
altruism
when we act to promote someone else’s well being, even though we may suffer a cost in terms of financial time or loss, or by incurring personal risk
maximizing theory
assumes that individuals derive pleasure as a result or giving to others
Choice architecture
A framework setting out different ways in which choices can be presented to consumers and the impact they have on consumer decision making
default choice
an option that is selected automatically unless an alternative Is specified
framing
the concept that how something is presented, influences the choices that people make. in general people are influenced by how information is presented to them