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We present a model of credit cycles arising from diagnostic expectations – a belief formation mechanism based on Kahneman and Tversky's (1972) representativeness heuristic. In this formulation, when forming their beliefs agents overweight future outcomes that have become more likely in light...
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We present a model of credit cycles arising from diagnostic expectations - a belief formation mechanism based on Kahneman and Tversky's (1972) representativeness heuristic. In this formulation, when forming their beliefs agents overweight future outcomes that have become more likely in light of...
Persistent link: https://www.econbiz.de/10012456409
We present a theory of context-dependent choice in which a consumer's attention is drawn to salient attributes of goods …, such as quality or price. An attribute is salient for a good when it stands out among the good's characteristics, in the … are characterized by only one quality attribute and price, salience tilts choices toward goods with higher ratios of …
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