Cover; Contents; List of Figures; List of Tables; Preface; Acknowledgments; About the Author; Introduction; 1 Introduction; 1.1 Economics: Neoclassical and behavioral; 1.2 The origins of behavioral economics; 1.3 Methods; 1.4 Looking ahead; PART 1 Choice under Certainty; 2 Rational Choice under Certainty; 2.1 Introduction; 2.2 Preferences; 2.3 Rational preferences; 2.4 Indifference and strict preference; 2.5 Preference orderings; 2.6 Choice under certainty; 2.7 Utility; 2.8 Discussion; 3 Decision-Making under Certainty; 3.1 Introduction; 3.2 Opportunity costs; 3.3 Sunk costs.
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11.2 Social preferences: Altruism, envy, fairness, and justice11.3 Intentions, reciprocity, and trust; 11.4 Limited strategic thinking; 11.5 Discussion; PART 6 Concluding Remarks; 12 Behavioral Welfare Economics, Libertarian Paternalism, and the Nudge Agenda; 12.1 Introduction; 12.2 Behavioral welfare economics; 12.3 Libertarian paternalism and the nudge agenda; 12.4 Criticism; 12.5 Discussion; 13 General Discussion; Appendix: Answer Key; Bibliography; Index.
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3.4 Menu dependence and the decoy effect3.5 Loss aversion and the endowment effect; 3.6 Anchoring and adjustment; 3.7 Discussion; PART 2 Judgment under Risk and Uncertainty; 4 Probability Judgment; 4.1 Introduction; 4.2 Fundamentals of probability theory; 4.3 Unconditional probability; 4.4 Conditional probability; 4.5 Total probability and Bayes's rule; 4.6 Bayesian updating; 4.7 Discussion; 5 Judgment under Risk and Uncertainty; 5.1 Introduction; 5.2 The gambler's fallacy; 5.3 Conjunction and disjunction fallacies; 5.4 Base-rate neglect; 5.5 Confirmation bias; 5.6 Availability.
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5.7 Overconfidence5.8 Discussion; PART 3 Choice under Risk and Uncertainty; 6 Rational Choice under Risk and Uncertainty; 6.1 Introduction; 6.2 Uncertainty; 6.3 Expected value; 6.4 Expected utility; 6.5 Attitudes toward risk; 6.6 Discussion; 7 Decision-Making under Risk and Uncertainty; 7.1 Introduction; 7.2 Framing effects in decision-making under risk; 7.3 Bundling and mental accounting; 7.4 The Allais problem and the sure-thing principle; 7.5 The Ellsberg problem and ambiguity aversion; 7.6 Probability weighting; 7.7 Discussion; PART 4 Intertemporal Choice; 8 The Discounted Utility Model.
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8.1 Introduction8.2 Interest rates; 8.3 Exponential discounting; 8.4 What is the rational delta?; 8.5 Discussion; 9 Intertemporal Choice; 9.1 Introduction; 9.2 Hyperbolic discounting; 9.3 Choosing not to choose; 9.4 Preferences over profiles; 9.5 Misprediction and miswanting; 9.6 Discussion; PART 5 Strategic Interaction; 10 Analytical Game Theory; 10.1 Introduction; 10.2 Nash equilibrium in pure strategies; 10.3 Nash equilibrium in mixed strategies; 10.4 Equilibrium refinements; 10.5 Discussion; 11 Behavioral Game Theory; 11.1 Introduction.
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SUMMARY OR ABSTRACT
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A concise, self-contained text that introduces students to the subject of behavioral economics by comparing and contrasting its theories and models with those of mainstream economics. Full of examples, exercises and problems, this book emphasises the intuition behind the concepts and is suitable for students from a wide range of disciplines.