Overview
The neuroeconomics of risk assessment is a fascinating field that merges neuroscience with economics to understand how we make decisions under uncertainty. By studying the brain's response to risk and reward, researchers can uncover the underlying mechanisms that drive our choices. This interdiscipl...
Key Terms
Example: Neuroeconomics helps explain why people make certain financial choices.
Example: People may perceive flying as riskier than driving, despite statistics.
Example: Confirmation bias leads people to favor information that confirms their beliefs.
Example: Prospect theory explains why people fear losses more than they value gains.
Example: Investors may hold onto losing stocks to avoid realizing a loss.
Example: People are more likely to choose a surgery if it has a 90% success rate than if it has a 10% failure rate.