Heuristics and Biases
Lecture no. 12 from the course: Behavioral Economics: When Psychology and Economics Collide
Taught by Professor Scott Huettel | 30 min | Categories: The Great Courses Plus Online Economics & Finance Courses
Behavioral economics defines “heuristics” as internal rules or tools that people use to optimize decision making. Explore four of the most commonly used heuristics, observable in decisions involving memory, valuation, probabilities, and emotions. Using real-world examples, identify where these tools are helpful, and where they fail.