Table of contents:
Preface;
INTRODUCTION;
1 Introduction;
1.1 What is this book?;
1.2 The origins of behavioral economics;
1.3 Methods;
1.4 Looking ahead;
I CHOICE UNDER CERTAINTY;
2 Rational Choice Under Certainty;
2.1 Introduction;
2.2 Preferences;
2.3 Rational preferences Box: Logical symbols;
2.4 Indifference and strict preference Box: How to do proofs;
2.5 Preference orderings;
2.6 Choice under certainty;
2.7 Utility Box: A final word about proofs;
2.8 Discussion;
3 Decision-making Under Certainty;
3.1 Introduction;
3.2 Opportunity costs;
3.3 Sunk costs;
3.4 Menu dependence and the decoy effect;
3.5 Loss aversion and the endowment effect;
3.6 Anchoring and adjustment;
3.7 Discussion;
II JUDGMENT UNDER RISK AND UNCERTAINTY;
4 Probability Judgment;
4.1 Introduction;
4.2 Fundamentals of probability theory;
4.3 Unconditional probability Box: Odds;
4.4 Conditional probability;
4.5 Total probability and Bayes's rule;
4.6 Bayesian updating;
4.7 Discussion;
5 Judgment Under Risk and Uncertainty;
5.1 Introduction;
5.2 The gambler's fallacy;
5.3 Conjunction and disjunction fallacies;
5.4 Base-rate neglect;
5.5 Confirmation bias;
5.6 Availability;
5.7 Discussion;
III CHOICE UNDER RISK AND UNCERTAINTY;
6 Rational Choice Under Risk and Uncertainty;
6.1 Introduction;
6.2 Uncertainty;
6.3 Expected value;
6.4 Expected utility;
6.5 Attitudes toward risk;
6.6 Discussion;
7 Decision-Making under Risk and Uncertainty;
7.1 Introduction;
7.2 Framing effects in decision-making under risk;
7.3 Bundling and mental accounting;
7.4 The Allais problem and the sure-thing principle;
7.5 The Ellsberg problem and ambiguity aversion;
7.6 Probability weighting;
7.7 Discussion;
IV INTERTEMPORAL CHOICE;
8 The Discounted Utility Model;
8.1 Introduction;
8.2 Interest rates;
8.3 Exponential discounting Box: Discount rates;
8.4 Discussion;
9 Intertemporal Choice;
9.1 Introduction;
9.2 Hyperbolic discounting;
9.3 Choosing not to choose;
9.4 Preferences over profiles;
9.5 Discussion;
V STRATEGIC INTERACTION;
10 Analytical Game Theory;
10.1 Introduction;
10.2 Nash equilibrium in pure strategies;
10.3 Nash equilibrium in mixed strategies;
10.4 Equilibrium refinements;
10.5 Discussion;
11 Behavioral Game Theory;
11.1 Introduction;
11.2 Social preferences: altruism, envy, fairness, and justice;
11.3 Intentions, reciprocity, and trust;
11.4 Limited strategic thinking;
11.5 Discussion;
VI CONCLUDING REMARKS;
12 General Discussion;
12.1 Introduction;
12.2 Behavioral welfare economics;
12.3 Assessing behavioral economics;
12.4 Conclusion;
Answer Key;
Bibliography;
Index.