Normative Foundations in Behavioral Economics

These flashcards cover key concepts in normative foundations of behavioral economics, highlighting definitions and theories prevalent in the field.

Normative Economics

Branch of economics that examines what ought to be and includes value judgments.

Positive Economics

Branch of economics that analyzes how the world works without value judgments.

Welfare Hedonism

The theory that well-being consists solely in the presence of pleasure and the absence of pain.

Objective List Accounts

The theory that well-being consists in having goods in one’s life that are objectively worth having.

Revealed Preference Assumption

The assumption that people choose what is best for themselves based on their choices.

Paternalistic Policies

Policies aimed at changing people's behavior for their own good.

Characterization Failure

Mistakes in indirect judgment when decision makers mischaracterize available actions or their consequences.

Behavioral Welfare Economics

An analysis of how behavioral economics critiques classical approaches to welfare economics.

Self-reported Well-being

Measures of well-being based on individuals' perceptions of their own satisfaction and happiness.

Elasticity of Labor Supply

The responsiveness of supply of labor to changes in wages or taxation.