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

Question

Question

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

True or False

Answer 1

Answer #1

False.

Behavioral economists believe that people are not rational and hence they do not hold enough capacity of taking good decisions.

Therefore they make more errors while taking decisions.

While neoclassical economists believe that, people usually tend to maximize their own benefits and hence are completely rational.

Answer 2

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