Relative Thinking Theory

Preprint OPEN
Ofer H. Azar;
  • Subject: Relative thinking, relative differences, behavioral decision making, behavioral economics, psychological economics, Weber's law, absolute differences, percentages, ratios
    • jel: jel:D10 | jel:M30 | jel:L10 | jel:C91 | jel:A12

The article presents a theory that I denote “Relative Thinking Theory,” which claims that people consider relative differences and not only absolute differences when making various economics decisions, even in those cases where the rational model dictates that people sh... View more
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