Economists view a rational human as someone who prefer more to less,to be rational,choice must be employed in making decisive decisions.
The truth remains that we are all irrational and we all make mental errors.Sometimes we make logical decisions but most time,we make emotional,irrational and confusing choices.The bellow errors show up in our daily choices and decisions:
1)LOSS AVERSION
This refers to our tendency to strongly prefer avoiding losses over acquiring gains.If one receive 20 pounds,he will experience an increase in satisfaction but when he loss same amount,there will be a drastic higher loss in satisfaction. the two conditions are opposite but different magnitude.
Therefore,our tendency to avoid loss influence our decisions and change our behavior.
