Neoclassical economics and behavioral economics are similar in the assumption that people are capable of making accurate, sometimes complex, calculations with respect to their utility-maximizing decisions.

Question

Quizplus · Accepted Answer

Neoclassical economics assumes that individuals have rational preferences and are capable of making utility-maximizing decisions based on these preferences, often implying the ability to make complex calculations. In contrast, behavioral economics challenges this assumption by incorporating psychological insights into economic models, suggesting that people often make decisions based on biases, heuristics, and other factors that deviate from purely rational calculations.

Neoclassical Economics and Behavioral Economics Are Similar in the Assumption