Using the following article please answer all questions.

"Maps of Bounded Rationality: Psychology for Behavioral Economics" (Kahenman)

1. (a) Kahneman (2003) argues that a judgment is mediated by a heuristic when an individual assesses a target attribute by substituting another property of that object - the heuristic attribute. Why would an individual make such a substitution? Explain why the results of Strack et al. (1988) are an example of attribute substitution (see Kahneman (2003) for a description).

(b) What is a prototype? Why do prototypes have consequences for pricing a quantity of public or private goods? Be sure to connect your answer to attribute substitution.

(c) In List (2002) traders of sports cards assigned significantly higher value to a set of ten sports cards labeled "mint/near mint condition" than to a set that included the same ten sports cards and three additional cards labeled "poor condition." These individuals on average bid an average of $4.05 for the small set of cards and only $1.82 for the larger set. Connect the discussion in item (b) above to the results reported in List (2002).

Link to article: https://www.jstor.org/stable/pdf/3132137.pdf?refreqid=excelsior%3Afd019555d3274005615835d11d9c2a29&ab_segments=&origin=&initiator=&acceptTC=1

"Loss Aversion and Seller Behavior: Evidence from the Housing Market" (Genesove and Mayer)

2. (a) Genesove and Mayer (2001) consider the behavior of the Boston Condo market and argue that the market behaves in ways that are inconsistent with standard neoclassical theory. What is the inconsistency? How does loss aversion account for the inconsistency? Be sure to distinguish between initial purchase price, expected selling price, and asking price.

(b) Use Table II to explain how the Boston Condo Market shows evidence of loss aversion and diminishing sensitivity. Explain the implications of loss aversion for the length of time that a condo spends on the market. Why is it important that Genesove and Mayer show a link between loss aversion and time on the market?

Link to article: https://www.jstor.org/stable/pdf/2696458.pdf?refreqid=excelsior%3A6706bd1f09f2adce433dbdc082372184&ab_segments=&origin=&initiator=