the tendency people have to be more confident in their own abilities, such as driving, teaching, or spelling, than is objectively reasonable

refers to an emotional bias that causes individuals to value an owned object higher, often irrationally, than its market value

the tendency to process information by looking for, or interpreting, information that is consistent with one’s existing beliefs

the phenomenon where a real or potential loss is perceived by individuals as psychologically or emotionally more severe than an equivalent gain

the phenomenon where a person is reluctant to abandon a strategy or course of action because they have invested heavily in it, even when it is clear that abandonment would be more beneficial

the amount of pain (or pleasure) we get from feeling like we paid more (or less) than something is really worth

separating money into imaginary categories in your mind

this is the psychological phenomenon in which people do something primarily because other people are doing it, regardless of their own beliefs, which they may ignore or override

You want to see a movie that almost everyone has seen and is raving about.  What kind of economic behavior best describes this situation?

You are a 17 year-old driver who has been a passenger in a car for your entire life.  You also recently passed the written driving test and have 6 hours of behind-the-wheel experience.  You consider yourself an above average driver.  What kind of economic behavior is this? 

It's Prime Shopping Day.  You notice that a pair of wireless earbuds is on sale if you buy then in the next 20 minutes.  You decide to buy them while the sale is on.  What kind of economic behavior is this? 

You have this gaming chair that you really like, but so does your best friend.  The friend offers you $100 for your chair, even though you only paid $80 for it.  You refuse to sell it.  What kind of economic behavior is this? 

You go to the Jersey shore on most weekends.  Then you visit that same beach on a Wednesday.  You notice that the waves that Wednesday not as big as when you visit on the weekend.  You're convinced that weekend waves are bigger than weekday waves. What kind of economic behavior is this? 

Six moths ago, you noticed the price of your Disney stock kept going down and so you sold it -- losing $2,000 by selling it.  Now the price of Disney stock is at an all-time low and all the experts are saying to buy it.  However, you got burned before and refuse to buy it.  What kind of economic behavior is this? 

You bought a cottage in the mountains.  You used to love going there but it's not as much fun as it used to be.  Yet you continue to go every weekend and always regret spending time there.  What kind of economic behavior is this?   

You just found $100 (that is, five $20 bills) on the sidewalk.  You can't believe your good fortune and decide to spend it all on a frivolous, unnecessary gift for yourself.  What kind of economic behavior is this? 

You drive 10 miles to buy a mini blue tooth speaker which is on sale for $15 (that's $10 less than the price of the same speaker at local store.   A week later, you learn that the same store which is 10 miles away has a $1,000 notebook computer on sale for $10 less than it is at the local store.  You decide to buy the notebook at the closer local store.  What kind of economic behavior is this? 

Which of the following is NOT true about Behavioral Economics?

People see an average of about 3,000 advertisements or product impressions per day.