Financial decision maker characteristics

We can now see the challenge facing the human decision maker. To achieve their consumption goals, they need to decide how to save, borrow, invest and insure. They need to do this in an environment of uncertainty, over time, facing a complex sea of products.

This way we approach this challenge is profoundly affected by the way we make decisions. In this chapter, we will examine the human characteristics that affect our financial decisions.

You have covered some of these concepts in other units in your course. In those cases, I will provide a recap and discuss how this concept might apply in the context of financial decision making by individuals and households. Those that are new, we will explore in more depth.