Prospect Theory
Investors
Is it easier to spend money using a credit card or cash?
Credit Card
Do people want to naturally trust each other?
Yes
what types of things affect your economic decisions
Who is Mr. Ward's best friend?
Ali
Which option would someone choose and why?
A) A certain win of $250, versus
B) A 25% chance to win $1000 and a 75% chance to win nothing?
Option A because people want to know they will gain money and not lose money.
Do people enjoy spending more money when they have a positive transaction experience?
Yes!
What is the fastest way for a company to lose its trust with costumers?
By deceiving them
What gender typically thinks inflation is much higher than reality
Women
What are Mr. Ward's favorite shoes?
Hey Dudes
Which choice do you think gives you a better chance to win?
A) Playing the lottery
B) Gambling
Gambling because you have a higher chance at income.
What is Mental Accounting?
A behavioral bias that people make financial decisions based on emotionally-charged considerations instead of rational ones
Does economic growth increase or decrease with trust?
Increases
What is the # 1 factor when decision-making
family or friends
Who said this, "DON"T MAKE ME COME OVER THERE!"
Mr. Ward
What is Prospect Theory?
Explains the way choices are asked influences the risks a person is willing to make.
What are the 2 types of spenders?
Tightwads and Spendthrifts
When do people find it harder to trust someone?
When they are from different social groups
What are the 2 categories that your spending habits can put you in
financial sophisticates” or “financial naifs
What is economics?
A social science that focuses on the production, distribution, and consumption of goods and services
Who said this, "Giving something up is more painful than the pleasure we derive from receiving it."
Behavioral Economics scientist Alain Samson
What is fungibility?
Fungibility is the belief that all money is interchangeable
When is deception easiest?
The benefits are high and the risk is low
What religion cares more about education than any other religion
Jewish
What is the name of the book we read this year and the author's name?
Naked Economics and Charles Wheelan