ExamRizzTARA
Leave

TSA Original Paper 2 · Question 6 · Main Conclusion

Save

Economists have long assumed that people make rational decisions to maximise their self-interest. Behavioural economics has challenged this assumption by documenting numerous ways in which people's decisions deviate from rational self-interest. People pay more attention to potential losses than equivalent gains, are influenced by irrelevant information, and make different choices depending on how options are framed. However, the conclusion that humans are fundamentally irrational is unjustified. The so-called biases identified by behavioural economics often represent rational adaptations to the environment in which humans evolved. Making quick decisions based on limited information was more useful to our ancestors than lengthy deliberation. What appears irrational in laboratory experiments may be perfectly rational in the real-world contexts where these decision-making strategies originally developed. Which one of the following best expresses the main conclusion of the above argument?

Select the correct answer.