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There are many human behaviors that economists should consider when creating economic models. One of these behaviors is rationality. Most individuals make rational decisions which
There are many human behaviors that economists should consider when creating economic models. One of these behaviors is rationality. Most individuals make rational decisions which will lead to them receiving the maximum personal benefit. Another human behavior that should be considered is how people are often influenced by the people they are close to when making decisions. Most people base their decisions on what they've heard from others' experiences. Lastly, another behavior to observe is people are reluctant to change their mind once they've made a decision, and most will interpret information to confirm their own beliefs which is sometimes called confirmation bias. By observing these human behaviors and using this when creating economic models, economists can develop more realistic and informative models for understanding and predicting economic events. summerize
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