Asked by Wenlu Zhang on Jun 25, 2024

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Both neoclassical and behavioral economics believe that people are mostly rational in both their decision making and their actions.

Neoclassical Economics

The dominant and conventional branch of economic theory that attempts to predict human behavior by building economic models based on simplifying assumptions about people’s motives and capabilities. These include that people are fundamentally rational; motivated almost entirely by self-interest; good at math; and unaffected by heuristics, time inconsistency, and self-control problems.

Rational Decision

Made when an individual, with clear set objectives, uses logic and all available information to choose the best possible outcome from various alternatives.

  • Seize the fundamental aspects of behavioral economics and their distinction from neoclassical economics.
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Sophia FrancisJun 25, 2024
Final Answer :
False
Explanation :
Neoclassical economics assumes that individuals are rational and seek to maximize utility or profit, while behavioral economics incorporates psychological insights, suggesting that people often act irrationally due to biases, heuristics, and other factors.