ABSTRACT
In this, and the next, chapter our objective will shift away from trying to describe behavior to that of trying to understand the reasons for behavior. For example, we want to ask: Why are people risk averse? Why do people value fairness? Why is there reference dependence? Hopefully, you agree that these are fascinating questions. In answering them we can learn not only why people behave the way they do but can also get additional insight on how they behave. Potentially, therefore, we can learn a lot.
