Economic foundations

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Behavioural economics builds on the frameworks and tools used by economists. In this part, I introduce some of the core economic concepts that we will build on or explicitly deviate from in our exploration of behavioural economics.

I will first examine the preference relation used by economists.

Then I will discuss how economists define rationality, and the foundational axioms of rationality, completeness and transitivity.

Finally, I will describe how the preference relation and axioms form the basis of utility functions.