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1) Suppose that Joe enjoys and repeatedly does stupid things like getting heavily into debt and insulting police officers. Do these actions constitute systematic errors? If he gets what he wants each time, are his stupid actions even considered to be errors by economists? Explain.
2) Why do behavioural economists consider it helpful to base a theory of economic behavior on the actual mental processes that people use to make decisions? Why do neoclassical economists not care about whether a theory incorporates those actual mental processes?
3) What does behavioural economics have to say about each of the following statements?
a) "Nobody is truly charitable--they just give money to show off."
b) "America has a ruthless capitalist system. Considerations of fairness are totally ignored."
c) "Selfish people always get ahead. It's like nobody even notices!"
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