Quizzes & Activities
Behavioural Economics (Quizlet Revision Activity)
- AS, A-Level, IB
- AQA, Edexcel, OCR, IB, Eduqas, WJEC
Last updated 8 Apr 2022
Here is a quizlet revision quiz on some key behavioural economics key terms.
Here are some key behavioural economics terms to revise:
Altruism - When humans behave with more kindness and fairness than if they behaved rationally
Anchoring - Use of (usually) irrelevant information as a reference point to help make an estimate of an unknown piece of information
System 1 Thinking - When people consider what automatically comes to mind, it is effortless and intuitive.
Bias - A systematic deviation from what is believed to be rational choice
Choice Architecture - When the environment in which someone must make a decision has been carefully designed to try and influence that decision
Hindsight bias - Tendency to see events in the past as having been predictable
Sunk cost bias - Tendency to continue a behaviour as result of previously invested resources (such as time, money or effort)
System 2 thinking = Decision making that is slow, controlled, considered and conscious
Habit - A rigid pattern of behaviour
Default choice - Option that a consumer selects if he or she does nothing
Herd behaviour - Phenomenon in which individuals act collectively as part of a group
Endowment effect - People tend to value things they own more than others value them
Heuristic - When we use a rule of thumb to make a decision more quickly
Loss aversion - When people fear potential loss from an action more than an equivalent potential gain
Mental accounting - When people treat money differently depending on its source and its intended/planned use.
Nudge = Technique used by choice architects to change someone's behaviour in an easy and low-cost way, without reducing the number of choices
Priming = Cues that work subconsciously and prime us to behave / choose in certain ways
Reciprocity - Returning another's action with another equivalent action
Placebo effect - When an external stimulus (such as a sugar pill) can have an impact on the effectiveness of treatment even if the medication or procedure is fake.
Gambler's Fallacy - Mistaken belief held by some people that independent events are interrelated
In this revision video we look at some of the cognitive biases that can affect people’s behaviour. The existence of such biases calls into question economic models that assume people always act rationally, attempting to maximise their individual self-interest.
Behavioural economics is the topic area we focus on this live revision session for A-Level Economics students.