Decision Making Concepts and Principles
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Unit 2 discusses the decision making model and there are multipule scenarios in the unit 2 activity.
1. If you were given a choice which of the following gambles would you prefer:
a. MiLLION DOLLARS FOR certain
b. a 10 percent chance of getting 2,500,000, an 89 percent chance of getting a 1,000,000 and a 1 percent chance of getting 0.
If you were given a chance which of the following gambles would you prefer?
a. An 11 percent chance of getting $1,000,000 and an 89 percent chance of getting 0
b. A a 10 percent chance of getting 2,500,000 and 90 percent chance of getting 0
If you were giving a choice which of the following would you prefer
a. 1 in 1000 change of winning 5,000
b. A sure gain of 5.00
If you were given a choice which would you probably prefer
a. 1 in a 1,000 chance of losing 5,000
b. A sure loss of 5.00
Note...there are multiple scenarios within the Unit 2 activity. Your goal is to try to identify the most applicable decision concept (from our learning in Unit 2) for each scenario, support your conclusions, and then provide a summary analysis about what you've learned.
There are three (3) parts to this project. Your research paper should address each one fully and thoroughly.
Part 1: Review each situation (there are FIVE scenarios within the activity) and identify the applicable decision concept (you may select from any theory, principle, model, etc. from our learning in Unit 2) that you believe to be present. Make sure you also explain (for each concept identified) "how" and "why" you arrived at your conclusion. In other words; what information helped you select each concept for each situation? Be sure you separate your findings and support for each of the different scenarios (don't put all your findings & support in a single block paragraph).
Part 2: Look at the different decision concepts you identified in part 1. What do you think those different concepts imply about how people make decisions?
Part 3: Do the decisions we make always need to be rational? Under what circumstances are we (decision makers) likely to make irrational choices?
Make sure you reinforce your work with suitable references from the text book and other authoritative and credible references, which must enhance the quality of your response. In the process please use correct APA citation style.
Study material,The Psychology of Judgement And Decision Making Plous,Scott
McGraw Hill.
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The response addresses the queries posted in 1124 Words, APA References
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The response addresses the queries posted in 1124 Words, APA References
Decision Making Models
Part 1:
Activity 1
The first activity consists of situation for the purpose of decision making. The first situation is deterministic situation, in which the decision maker or user is certain to have a fix amount (DECISION THEORY). The second situation in contrast to this is full of risk. In this situation, the amount given to the winner is fully depends on the risk associated with it. In this complicated situation, one of the theories of quantitative techniques named "Decision Making under Certainty" is applicable because all the required information is available in the activity.
This model of decision making is selected because there is certainty of getting a fix amount. On an average, generally decision makers want a fix amount of money with no risk. It is another matter that, in the second situation the expected return is more but it also has risk. Thus, to choose the first option is an appropriate decision of the decision maker (Rapoport, 1989).
In the second situation of the activity one, maximum number of decision makers will select the second option. This is because the difference between the winning and losing amount is negligible. In this kind of complex situation, most decision makers will select to have $25, 00000 that $10, 00000 as there is big difference between the two. This selection of the decision makers shows the probabilistic approach as well as maxim ax criterion.
Activity 2
As in the activity 2, majority of the students are in favor that they do not want to purchase probabilistic insurance because the insurance company does not provide the real value of the insurance or we can say that it was not worth going as per customer's desire. In this ...
Education
- MBA (IP), International Center for Internationa Business
- BBA, University of Rajasthan
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