There is a limit to the amount of information that a person can
absorb. This means that choices which they believe to be informed and rational
can look irrational to someone with greater knowledge. As any behavioural
economist worth their salt could tell you, this theory of decision-making is
known as “bounded
rationality”.
But you’d be forgiven for not knowing that. Economics is
littered with complicated-sounding ideas that, once grasped, help to make sense
of the world. So we have published a glossary of economic terms, explained in
plain English. Our A to Z of
economics includes almost 500 cross-referenced entries. Some link to
longer explainer articles exploring the topic in more detail. And we’ll keep
adding to the list. So the next time you’re puzzled by the Nash equilibrium
or struggling to explain quantitative
tightening you’ll know where to look. We hope it offers you an absolute
advantage (which is also, conveniently, the first entry on the
list).