Discuss? Traditional economic theory makes a number of simplifying assumptions that may not always be true, e.g.,

 Discuss?

Transcribed Image Text:

Traditional economic theory makes a number of simplifying assumptions that may not always be true, e.g., that people always make rational decisions that are in their own best interest. In recent years, a new subdiscipline of economics has emerged called behavioral economics that attempts to employ a more realistic set of assumptions about how people behave to explain economic decision-making. Traditional economic theory makes a number of simplifying assumptions that may not always be true, e.g., that people always make rational decisions that are in their own best interest. In recent years, a new subdiscipline of economics has emerged called behavioral economics that attempts to employ a more realistic set of assumptions about how people behave to explain economic decision-making.

Answer rating: 100% (QA)

Traditional economic theory does make a number of simplifying assumptions that may not always be tru... View the full answer