Cost-Benefit Analysis: Decision Making and Ethics

This lecture introduces the concept of cost-benefit analysis, discussing how individuals make decisions based on weighing the pros and cons in their daily lives. The instructor explores the importance of converting all factors into monetary units and addresses the uncertainty surrounding costs and benefits. The lecture delves into different decision-making approaches, such as gut feeling, following group recommendations, and habit formation. It also touches on the ethical considerations of cost-benefit analysis, emphasizing the need for decisions to align with societal values and priorities. The discussion extends to public decision-making processes, highlighting the complexities of assessing costs and benefits in a fair and rational manner.