Range Effects—Changing the Scale
Lecture no. 5 from the course: Behavioral Economics: When Psychology and Economics Collide
Taught by Professor Scott Huettel | 29 min | Categories: The Great Courses Plus Online Economics & Finance Courses
The principle of “range effects” describes how the relative difference between two quantities becomes less meaningful as the absolute values of those quantities get larger. Grasp how this phenomenon explains apparent inconsistencies in human behavior, and how its existence is linked to our biology. Learn specific steps you can take to minimize its unwanted influence on your decisions.