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Abstract

Kahneman was awarded Nonel Prize in Economic Sciences because of having integrated insights from psychological research into economic science, especially concerning human judgment and decision-making under uncertainty. He showed that how human judgment may take shortcuts that systematically depart from basic principles of probability. Before Kahneman’s work was published, economists had assumed humans were motivated by self-interest and made rational, calculated decisions. Kahneman challenged the accepted mode! Of how individuals behave economically, by suggesting that people’s behavior is determined by additional psychological motives and that these motives constitute important economic factors.

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