The study of how people make decisions when the outcome is uncertain, and the departures from optimal or "rational" choice that sometimes result is known as:
A) probability theory.
B) mental accounting.
C) behavioural economics.
D) bounded rationality.
E) the uncertainty principle.

Question

Quizplus · Accepted Answer

The study of how people make decisions when the outcome is uncertain, and the departures from optimal or "rational" choice that sometimes result is known as behavioural economics, making C the best choice. Probability theory is a branch of mathematics that deals with analyzing random events. Mental accounting refers to the tendency of people to mentally compartmentalize money and treat it differently depending on its source. Bounded rationality refers to the limitations of our ability to process information and make decisions, leading to suboptimal choices. The uncertainty principle is a concept from physics that describes the fundamental limits of measurement in the quantum world.

The Study of How People Make Decisions When the Outcome