101 lecture 22 behavioral economics

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101 lecture 22 behavioral economics

  1. 1. Next Exam ! Exam 7 Saturday January 4th 9:00 to 11:30 Men BG 088 Women B3 059 ! All Lectures and Chapters
  2. 2. Microeconomics Lecture 22 ! Asymmetric Information Behavioral Economics
  3. 3. Key Terms ! asymmetric information moral hazard agent principal adverse selection behavioral economics
  4. 4. agent a person acting for another person
  5. 5. principal a person for whom another person is acting for
  6. 6. moral hazard to act differently because someone else will pay the costs
  7. 7. asymmetric information unequal information
  8. 8. Who knows more about the car?
  9. 9. Asymmetric Information Not Equal Symmetric Buyer Asymmetric Seller
  10. 10. adverse selection taking advantage of someone’s lack of knowledge
  11. 11. adverse selection making a bad choice due to lack of information
  12. 12. moral hazard changing behavior after the transaction to make the other party worse off
  13. 13. moral hazard temptation to act immorally
  14. 14. behavioral economics the psychology of economic behavior
  15. 15. Are people always rational? Maybe not
  16. 16. Are people always rational? overconfidence too quick to conclude don’t easily change
  17. 17. Is fairness in more important than money? It can be !
  18. 18. Ultimatum Game
  19. 19. Exam 7 25 questions review six previous exams 150 questions

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