Study Guide for Microeconomics
9th Edition
ISBN: 9780134741123
Author: Robert Pindyck, Daniel Rubinfeld
Publisher: PEARSON
expand_more
expand_more
format_list_bulleted
Question
Chapter 19, Problem 6E
To determine
The knowledge of behavioural economics to analyse why people choose to have low deductibles on their automobile insurance policies
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solutionStudents have asked these similar questions
What is loss aversion? Explain how the topic is related to behavioral economics? Give at least two examples.
Suppose you are designing an intervention to increase daily physical activity among adults. Describe how you would draw on concepts from behavioral economics to design the intervention.
why is behavioral economic beliefs better than traditional economic
Chapter 19 Solutions
Study Guide for Microeconomics
Knowledge Booster
Similar questions
- Explain two or more of the behavioral economics concepts listed below and give an example of each Response Parameters Perhaps you can provide a link to a graphic or a video that enhances your discussion. Concepts: Confirmation bias, overconfidence effect, hindsight bias, availability heuristic, planning fallacy, framing effects, anchoring, endowment effect, status quo effectarrow_forwardAccording to behavioral economics, consumers A. do not always behave rationally because they fail to ignore sunk costs. B. always behave rationally because they account for sunk costs. C. always behave rationally because they take into account monetary costs and nonmonetary opportunity costs. D. do not always behave rationally because they take into account nonmonetary opportunity costs. E. do not always behave rationally because they accurately project their future behavior.arrow_forwardAn economics professor finds that he strictly prefers a $10 bottle of wine over an $8 bottle, and a $12 bottle over a $10 bottle, and so on, but an $8 bottle over a $200 bottle. Explain why this makes him irrational according to a behavioral economics theory.arrow_forward
- How does the implementation of behavioral economics principles influence the success of fundraising campaigns for non-profit organizations?arrow_forwardWhat does behavioral economics have to say about each of the following statements? a. “Nobody is truly charitable—they just give money to show off.” b. “America has a ruthless capitalist system. Considerations of fairness are totally ignored.” c. “Selfish people always get ahead. It’s like nobody even notices!”arrow_forwardPeer pressure is an important influence on the behavior of youngsters. For instance, many preteens begin smoking because their friends pressure them into being “cool” by smoking. Using utility theory, how would you explain peer pressure? How would this compare with the explanations provided by behavioral economics and neuroeconomics?arrow_forward
- Identify a personal economic decision that was driven by a behavioral bias rather than by pure rational behavior. Given your understanding of behavioral economics, how would your decision differ today? Please provide a detailed discussion. I will not give a positive rating for vague responses.arrow_forwardWhat is the goal of behavioral economics? Group of answer choices To eliminate the consumers’ state of mind from consideration in economic analysis. To shift economic theory from a mathematical base to more of a psychological study. To integrate the insights of psychology into economics to enrich our understanding of decision-making. To study consumer behavior over time rather than behavior in the moment and integrate these insights in economic analysis.arrow_forwardA company has a dental plan for its employees. According to behavioral economics, the participation rate will be about the same wether people are given en easy enrollment form to fill out or are enrolled automatically but given en easy opt-out form to complete if they don’t want to participatearrow_forward
- University Health System located in San Antonio, Texas implemented a patient navigation program to improve screening for colorectal for Hispanic males, 50 and older, who were members of CareLink (Bexar County’s financial assistance program), and who had not received colorectal cancer screening in the last 10 years. The program incorporated the principle of ____________ (i.e. mistakes are expected and opportunities are given for correction) by making calls to remind patients of their missed appointments. This is a behavioral economics principle under the behavioral concept of ____________. Availability, Judgement Allowance for errors, Choice architecture Framing effects, Decision-making Fairness, Decision-makingarrow_forwardBehavioral economics a. integrates psychological insights into economic models. b. relies on the assumption that homo economicus describes economic decision-making. c. assumes that economic agents have full information about the conditions surrounding their decisions. d. All of the above are correct.arrow_forwardWhy might prospect theory-like behavior be rational? Why do many behavioral economists argue that such behavior irrational?arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you