Theme 1: Behavioural Economics - Complete set of presentations

Click here at access several short clips on 'Behavioural Economics'. Excellent for all aspects of a topic that is new to the syllabus and therefore, very likely to be tested at AS and A level.

The assumption of rationality is the following:

Agents choose independently
An agent has fixed tastes and preferences
Gathers complete information on the alternatives
Always make optimal choice given his/her preferences

In the new behavioural models, economic agents are seen to act more like the following:

Have limited computational capacity
Are influenced by their social networks
Often act reciprocally
Lack self control
Make different choices in hot and cold states
Often fall back on simple heuristics
Satisfice rather than maximise
Are influenced to some extent by persistent cognitive biases