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Behavioral Economics For Dummies® by Morris Altman, PhD

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Part II

Understanding Choice

9781118089699-pp0201.eps

In this part . . .

Free to choose is a mantra in conventional economics. Freedom of choice is thought to be the goose that lays the golden eggs of happiness and wealth.

In this part, I examine the role and limits of free choice in real-world economic decision making in both the conventional economics narrative and from the behavioral economics perspective.

I also fill you in on the unconventional tools people have developed to make decisions and tell you when these tools produce efficient and effective decisions and under what conditions they’re prone to generate errors and biases.

How people’s choices are framed plays an important role in determining their decisions, and I discuss this subject in some detail in this part, paying particular attention to the importance of negative and positive frames for decision making.

I cover the important influences that history, culture, norms, peers, and family have on people’s choices. People don’t make choices in a vacuum, contrary to what conventional economics would have you believe.

Finally, I elaborate on the roles that gender, children, and age play in decision making.

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