Essay on judgement and decision makin

2593 Words Sep 7th, 2014 11 Pages
Judgement and Decision Making

Table of Contents
Abstract: Article 1…………………………………………………………………………….3
Table of Contents 2
Article 1 3
Abstract: Readings 1.3 Jackall, R. (1988), ‘Looking up and looking around’. 3
Practical Experience 3
Article 2 4
Abstract: Reading 2.2, Kahneman, D. and Tvesky, A. (1984), ‘Choices, values, and frames’. 4
Practical Experience 4
Article 3 5
Practical Experience 6
Article 4 6
Abstract: Reading 5.1. Jungermann, H. (1983) ‘The two camps on rationality’. 6
Practical Experience 7
Article 5 7
Abstract: Reading 4.3. ‘Theories of Risk perception: Who fears what and why?’ 7
Practical Experience 8
References 8
‘Theories of Risk perception: Who fears
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By choosing risk aversion and Bernoulli’s (1954) essay the authors have tried to explain why most people are usually found to be averse towards risk and why the degree of risk aversion lessens with rising wealth.
In order to tackle the normative issues the author shifts focus from psychology to the decision theory. According to the Modern Decision Theory the risky prospects are being characterised by the probable results as well as the probabilities of all the results. The standard economic model suggests that all the human beings depict a very stable “utility curve” which is being implied by their choices but this article attacks directly on the axiom of extensionality. Therefore it is proposed in this article that alternative framings need systematic examination which presents a helpful and highly beneficial reflective device which can easily be of advantage for the decision makers to assess all the values, attached with the primary as well as secondary consequences of their choices.
The article specifies that mostly stability results because of loss aversion instead of change. Therefore both loss aversion as well as effects of consequent endowment is very unlikely to play very insignificant role in the economic exchanges which take place every day or in routine. Thus finally it

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