scholarly journals ENDOWMENT EFFECT AND HOUSING DECISIONS

2016 ◽  
Vol 20 (4) ◽  
pp. 341-353 ◽  
Author(s):  
Helen X. H. BAO ◽  
Cynthia M. GONG
Keyword(s):  
Decision Making ◽  
Prospect Theory ◽  
Significant Influence ◽  
Endowment Effect ◽  
Willingness To Accept ◽  
Opportunity Costs ◽  
Decision Making Process ◽  
Property Market ◽  
High Stake ◽  
Beijing China

Endowment effect refers to the reported gaps between willingness to accept and willingness to pay. According to prospect theory, this effect is a result of the underweighting of opportunity costs. Given the high stake involved in a typical housing transaction, endowment effect is expected to have a significant influence on housing decisions. We develop a theoretical framework to study the presence of endowment effect and its role in housing decision-making process. Three hypotheses are derived and tested through a field experiment conducted in Beijing, China. Our empirical results show that endowment effect plays an important role in the formation of judgmental biases in housing decisions. Moreover, endowment effect interacts with housing cycles. Our study highlights the application of prospect theory in the housing market; thus, it not only extends existing theoretical and empirical works in this important sector, but also clarifies consumer behavior in the emerging property market of China.

Prospect Theory and Foreign Policy Analysis

2017 ◽  
Author(s):  
Jeffrey W. Taliaferro
Keyword(s):  
Decision Making ◽  
Foreign Policy ◽  
Policy Analysis ◽  
Prospect Theory ◽  
Loss Aversion ◽  
Reference Point ◽  
Endowment Effect ◽  
Risk Averse ◽  
Foreign Policy Analysis ◽  
Point Selection

Prospect theory is one of the most influential behavioral theories in the international relations (IR) field, particularly among scholars of security studies, political psychology, and foreign policy analysis. Developed by Israeli psychologists Daniel Kahneman and Amos Tversky, prospect theory provides key insights into decision making under conditions of risk and uncertainty. For example, most individuals are risk averse to secure gains, but risk acceptant to avoid losses (loss aversion). In addition, most people value items they already posses more than they value items they want to acquire (endowment effect), and tend to be risk averse if they perceive themselves to be facing gains relative to their reference point (risk propensity). Prospect theory has generated an enormous volume of scholarship in IR, which can be divided into two “generations”. The first generation (1990–1999) sought to establish prospect theory’s plausibility in the “real world” by testing hypotheses derived from it against subjective expected-utility theory or rational choice models of foreign policy decision making. The second generation (2000–present) began to incorporate concepts associated with prospect theory and related experimental literature on group risk taking into existing mid-level theories of IR and foreign policy behavior. Two substantive areas covered by scholars during this period are coercive diplomacy and great power intervention in the periphery as they relate to loss aversion. Both generations of prospect theory literature suffer from conceptual and methodological difficulties, mainly around the issues of reference point selection, framing, and preference reversal outside laboratory settings.

When Do Opportunity Costs Count? The Impact of Vagueness, Project Completion Stage, and Management Accounting Experience

2010 ◽  
Vol 22 (1) ◽  
pp. 85-108 ◽  
Author(s):  
Lisa Marie Victoravich
Keyword(s):  
Decision Making ◽  
Management Accounting ◽  
Relevant Information ◽  
Opportunity Costs ◽  
Decision Making Process ◽  
Business Partner ◽  
Project Completion ◽  
Management Accountants ◽  
Two Factors ◽  
The Impact

ABSTRACT: Management accountants have recently migrated toward a business partner role, and as a result they often assist management with the decision-making process. Thus, it is imperative that they excel at identification of relevant information such as opportunity costs. This study experimentally tests the prediction that management accounting experience mitigates the tendency to ignore opportunity costs with respect to two factors: opportunity cost vagueness and project completion stage. This study also investigates whether attending to opportunity costs has an impact on project continuance decisions. Results indicate that management accounting experience mitigates the effect of vague opportunity costs and project completion stage. It was also found that attention to opportunity costs acts as mediator and this in turn reduces the tendency to continue an existing project. This suggests that attending to opportunity costs influences decision-making and that it is likely to have an economic consequence.

scholarly journals Teoria da Perspectiva e os Riscos Envolvidos no Processo de Tomada de Decisão: Análise de Conteúdo em Artigos do ProQuest

2016 ◽  
Vol 8 (1) ◽  
pp. 60-89
Author(s):  
Sady Darcy Da Silva-Junior ◽  
Edimara Mezzomo Luciano
Keyword(s):  
Decision Making ◽  
Content Analysis ◽  
Prospect Theory ◽  
Joint Analysis ◽  
Decision Making Process ◽  
Critical Attitude ◽  
Analysis Process ◽  
Methodological Approaches

In this study, the objective is to perform content analysis on articles of a reliable database, dealing with the prospect theory and the risks involved in the decision making process, evaluating some criteria for the theoretical and methodological approaches that allow a joint analysis and comparative. Therefore, a search in ProQuest database was performed which resulted in 15 articles that were submitted to content analysis process, based on the evaluation of nine factors identified by researchers. Among the results highlight the critical attitude to the prospect theory, in contrast to the assertion of his representative capacity of real situations and application in various situations.

Assessing the New Generation of Prison Classification Models

1983 ◽  
Vol 29 (4) ◽  
pp. 561-576 ◽  
Author(s):  
James Austin
Keyword(s):  
Decision Making ◽  
Computer Simulations ◽  
Prison Population ◽  
Willingness To Accept ◽  
Decision Making Process ◽  
Classification Models ◽  
State Prison ◽  
Maximum Security ◽  
Correctional Systems ◽  
New Generation

A number of new prison classification models are being promoted throughout the country. These objective models purport to improve equity, reduce costs, and make the classification decision-making process itself more explicit to inmates and staff. This paper uses computer simulations to test the effects of three well known models on the Nevada State Prison population. Results show that adoption of any of the three models would produce similar results; massive expansion of the minimum security beds, increased equity and explicitness in classification decision-making. Whether or not correctional officials utilize these models will depend upon the correctional administrator's willingness to accept these models as designed. Assuming these findings apply to other states, the nation's current inventory of minimum security beds and the capacity of community correctional systems need to be expanded to handle the large number of minimum security inmates now occupying expensive medium and maximum security bed space.

scholarly journals The role of Emotion Regulation on the link between False Memory and Decision Making

2020 ◽  
Vol 11 (1) ◽  
pp. 24-33
Author(s):  
Tiana Voicu ◽  
Andrada Busuioc ◽  
Alexandra Chirilă ◽  
Maria Nedelcu
Keyword(s):  
Decision Making ◽  
Emotion Regulation ◽  
Prospect Theory ◽  
Emotional Regulation ◽  
Emotional State ◽  
False Memories ◽  
Decision Making Process ◽  
Moderating Role ◽  
Life Decision

Current research is based on an experimental two-stage condition. The main objective is to investigate how false memories influence the decision making process, but also the role of emotional regulation in the mentioned relationship. The experiment is based on the DRM paradigm. Participants were aged 18-50 and were divided into two experimental groups. The study investigates both everyday life decision making strategies and those involving taking risks, according to Prospect Theory. The results show that false memories influence decision making process, especially regarding risky ones, but did not support the moderating role of emotion regulation in decision making process under the condition of false memories. The implications of research highlight both the people’s suggestibility and the type of emotional state they should have in order to maintain their trust on false memories.

scholarly journals Transparency in Predictive Algorithms: A Judicial Perspective

2021 ◽  
Author(s):  
Md. Abdul Malek
Keyword(s):  
Decision Making ◽  
Black Box ◽  
Decision Making Process ◽  
Judicial Decision ◽  
High Stake ◽  
Judicial Decision Making ◽  
Predictive Algorithm ◽  
Predictive Algorithms ◽  
Good Cause ◽  
Privacy Invasion

<p><i>Although the apparent hyperbole about the promises of AI algorithms has successfully entered upon the judicial precincts; it has also procreated some robust concerns spanning from unfairness, privacy invasion, bias, discrimination, and the lack of legitimacy</i><i> to the lack of transparency</i><i> and explainability</i><i>, </i><i>etc.</i><i> Notably, critics have already denounced </i><i>the current use of the </i><i>predictive algorithm in the judicial decision-making process in many ways, and branded them as ethically, legally, and technically distressing.</i><i> So contextually, whereas there is already an ongoing transparency debate on board, this paper attempts to revisit, extend and contribute to such simmering debate with a particular focus from a judicial perspective. Since there is a good cause to preserve and promote trust and confidence in the judiciary as a whole, a searchlight is beamed on exploring how and why justice algorithms ought to be transparent as to their outcomes, with a sufficient level of explainability, interpretability, intelligibility, and contestability. This paper also ends up delineating the tentative paths to do away with black-box effects, and suggesting the way out for the use of algorithms in the high-stake areas like the judicial settings.</i></p>

A study of boundedly rational behaviour in housing choice: evidence from Malaysia

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Consilz Tan
Keyword(s):  
Decision Making ◽  
Endowment Effect ◽  
Decision Making Process ◽  
Housing Choice ◽  
Cross Sectional ◽  
Demand And Supply ◽  
Content Type ◽  
Latent Constructs ◽  
Price Demand ◽  
Rational Behaviour

Purpose Housing choice is always a complicated decision with its dual functions as a roof over the head and as an investment good. This paper aims to investigate the boundedly rational behaviours that affect the housing choice three bounded behaviours play roles in explaining the decision-making behaviour of homebuyers when they acquire/sell a property. These behaviours are endowment effect, loss aversion and herding, which have implications on the decision-making process. Design/methodology/approach The research is based on cross-sectional questionnaires and collected from 587 respondents. Factor analysis and reliability tests were used to identify the latent construct of bounded rational housing choice behaviour. In the meantime, the study used one-way analysis of variance (ANOVA) to examine whether there are any differences in the housing choice based on the respondents’ demographic backgrounds. Findings The findings indicated that a total of 11 items were reduced to three factors that accounted for the decision-making in housing choice. There are significant differences in herding behaviour amongst respondents with different level of education and their purpose of looking for a house. Research limitations/implications This paper helps to identify latent constructs that shed light on the housing choice, especially on the bounded rational behaviour. Originality/value This is one of the few studies to explore boundedly rational behaviours in housing choice from the angle of homebuyers. Previous studies addressed housing choice in terms of price, demand and supply in general but not on individual homebuyers. The results will be useful to developers, policymakers, homebuyers as well as scholars in understanding the decision-making process in housing choice.

Is There an Allais Paradox? A Note on its Resolution

1989 ◽  
Vol 64 (3_suppl) ◽  
pp. 1223-1230 ◽  
Author(s):  
Michael E. Brady ◽  
Howard B. Lee
Keyword(s):  
Decision Making ◽  
Prospect Theory ◽  
Decision Maker ◽  
Consistent Pattern ◽  
Decision Making Process ◽  
Allais Paradox ◽  
Reflection Effect ◽  
Theory Analysis ◽  
Information Base

If a decision maker uses J. M. Keynes' “conventional coefficient of risk and weight” in making decisions under conditions of risk and/or uncertainty, then a consistent pattern of ranked outcome results is not paradoxical as proposed by Allais. Similarly, the paradoxical aspects of the “reflection effect” in Kahneman and Tversky's Prospect Theory analysis of the Allais' paradox, also vanishes. The Allais Paradox can only exist when probabilities are used in a decision-making process without a measure of confidence. By incorporating an information base for calculated probabilities the Allais Paradox results are rendered nonparadoxical.

scholarly journals Pengaruh Hiking Attributes Terhadap Sport Decision Di Taman Nasional Gunung Rinjani

2019 ◽  
Vol 19 (1) ◽  
pp. 44
Author(s):  
Oce Ridwanudin ◽  
Yeni Yuniawati ◽  
Y. K. Devananda
Keyword(s):  
Decision Making ◽  
Data Analysis ◽  
Linear Regression ◽  
Multiple Linear Regression ◽  
Sample Size ◽  
Significant Influence ◽  
Decision Making Process ◽  
Sport Tourism ◽  
Daily Routines ◽  
Independent Variable

Sport decision is a Sport Decision making process that becomes a basic consumption, mainly on Sport Tourism. TNGR os one Hiking Tour provider which is facing up the decrease in visit Decision of climb participant. On this research, thr independent variable (X) is Hikimg Attributes consisting of Physical Benefit, Mental Benefit, Facilitation of Trail and Information, the dependent variable (Y) is Sport Decision, The type of research used is descriptive varification, and the method used is explanatory survey with sample size 109 respondents. Techniques of data analysis an hypothesis testing used multiple linear regression, the result indicated the Hiking Attributes have a significant influence on Sport Decision. the most influential is Mental Benefit where TNGR has successfully made climb participant can reduce fatigue daily routines, so that make the participant feel the comfort and happy while Hiking on TNGR, the weakest factor is Facilitation Of Trail, this aspect needs tobe improved by cleanliness such as held the guidance about environment to climb participants, in addition officials can give a reward on the climbers that keep the environment

Sign in / Sign up

Export Citation Format

Share Document