Individual economic decision making

• What is altruism?

  Selfless concern for others' wellbeing
• What does anchoring bias refer to?

  Relying on the first piece of information
• What is asymmetric information?

  One party has more information than another
• How does availability bias affect decision making?

  It bases future event likelihood on past events
• What is behavioural economics?

  Economics incorporating psychological insights
• What is bounded rationality?

  Inability to make rational decisions due to limitations
• What does bounded self-control refer to?

  Inability to control oneself in decision making
• What is choice architecture?

  Framework showing effects of presenting choices
• Who is the economic man (Homo economicus)?

  A hypothetical person acting in self-interest
• What are heuristics?

  Rules of thumb used for decision making
• What is hyperbolic discounting?

  Value of rewards decreases with longer waits
• What is perfect information?

  Full knowledge by buyers and sellers
• What is risk aversion?

  Valuing losses more than equivalent gains
• What is symmetric information?

  Sufficient information for rational decisions
• What does utility refer to in economics?

  Benefit or satisfaction from consumption
• What is utility maximisation?

  Consumers aim to maximize personal welfare