Behavioral Economics

Adverse Selection Definition Adverse selection is an important concept in the fields of economics as well as insurance and risk management. Sometimes known as “anti-selection,”

Opportunity Cost Definition Opportunity cost is the positive opportunities missed out on by choosing a particular alternative (the next-best option). In other words, it’s what

Availability Bias Definition Availability bias describes the way in which human beings are biased toward judging events’ likelihood/frequency based on how easily their minds can

Time Inconsistency Definition The concept of time inconsistency can help us understand why some people procrastinate at work until the last minute, why we often

Decision-making under uncertainty is a complex topic because all decisions are made with some degree of uncertainty. But there are specific scenarios in which economic

Reference dependent preferences are those that depend on comparisons to reference points (often the current state (the status quo), past states, expectations about future states,