Daniel Kahneman and the late Amos Tversky are considered to be the founders of modern behavioural economics and finance. In recognition of their work, Kahneman was awarded the Nobel prize in economics in 2002.Reflect on the following points:Are economic agents rational? and What can psychology teach us that will enable us to understand and possibly predict, economic agents’ behaviour?How can “heuristics and biases” have an effect on economic decisions?To what extent is Kahneman’s work relevant to financial decisions?

Economic agents are individuals, organizations, or institutions that participate in economic…

Answered: Daniel Kahneman and the late Amos…

Macroeconomics: Private and Public Choice (MindTap Course List)

16th Edition

ISBN:9781305506756

Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson

Publisher:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson

Chapter2: Some Tools Of The Economist

Section: Chapter Questions

Problem 14CQ

See similar textbooks

Related questions

Question

Daniel Kahneman and the late Amos Tversky are considered to be the founders of modern behavioural economics and finance. In recognition of their work, Kahneman was awarded the Nobel prize in economics in 2002.

Reflect on the following points:

Are economic agents rational? and What can psychology teach us that will enable us to understand and possibly predict, economic agents’ behaviour?
How can “heuristics and biases” have an effect on economic decisions?
To what extent is Kahneman’s work relevant to financial decisions?

Expert Solution

Trending now

This is a popular solution!

Step by step

Solved in 4 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.

Similar questions