1.Explain the concept of the expected-value decision rule. In yourdiscussion, review how the expected-value decision rule played a partin a recent decision you made
Theconcept of the expected-value decision rule is primarily centered onthe determination of an individual that a particular situation oraction might result in the expected outcome. According to theexpected utility theory, each and every level of any given outcomehas a positive correlation with an anticipated degree of net benefitor pleasure. This expectation is commonly known as a utility(Bazerman & Moore, 2009). Similarly, expected value is alsosomewhat a gamble or a risky venture. In this case, there is noassurance of success. However, if an individual decides to take upthe decision and accept all the risks associated with it, he/ she hashigh chances of reaping significant benefits. Equally, the move mightresult in losses.
Therefore,it is crucial for an individual or a group of people to establish theexpected value prior to making any decision. This is essential ingiving them a guideline on the best path to pursue so that they canachieve the expected results or outcome. Notably, some choices willpay off and others may not be effective to produce what is expected(Heijne & Sanfey, 2015).For instance, the concept played a substantial role in changing mycharacter of being a spendthrift and subsequently running into debts.In accomplishing the same, I decided to embrace the habit of stickingto my budget, purchasing what is necessary and saving as much as Ican. That will enable me improve my current financial situation andmake better decisions about my future. Also, I will be able to avoidthe costly burden associated with debts in terms of interest rates,penalties or fines.
2.Framing and how it affects decision-making process
Basically,framing refers to a scenario where specific areas of a givensituation are evaluated, explored and then incorporated into thefinal decision (Xiaobo,et al, 2015).Framing is crucial in decision-making process since it provides abasis for making choices or arriving at the most suitableresolutions. Equally important, framing allows individuals to carryout a comprehensive analysis of the issues, options as well as theavailable information which will positively contribute to moreappropriate and effective decisions. The process helps in addressingall the questions pertaining to the choices yet to be implemented. Itis also important to note that framing is vital in preventing hastydecisions based on past assumptions. This might subsequently affectthe probability of success because the strategies of attaining thedesired outcomes are not fully examined. Besides, framing assistsindividuals avoid biasness by evaluating concrete data. On the samenote, the procedure helps individuals identify possible pitfalls,determine qualified personnel and develop suitable timelines (XIAOBOet al, 2015).
3. Describe the concepts of joint and separate preference reversals.Also, discuss the similarities and differences that exist between thetwo.
Theconcepts of joint and separate preference fundamentally refers to thetypes of evaluations that an individual performs based on informationprovided to evaluate situations (Bohnet, Van Geen & Bazerman,2015). Also, the ideologies can be grounded on items for estimatedvalue with reference to the conditions immediately at hand. Jointevaluations compare more than one option item or the situationpresented and evaluates those choices to determine the best value forthe money. Separate evaluations use the same relative concept, forinstance, instead of comparing two or more objects or circumstanceseach respective situation is evaluated on its own merit and a valueassigned. A major difference is that joint evaluation allows a personto see the choices and make a more informed decision. The separateevaluation leaves those choices out and compels an individual to makea decision based on limited or incomplete information. As a result,many times, an evaluation done prior in the separate evaluation modewill ultimately lead to the individual reversing their decision toselect another choice, if presented through joint evaluation. Thejoint and separate evaluation can also be used separate or inconjunction with one another to achieve the final decision. Differentattributes of the item being evaluated will determine the weight andhow the item fares in a decision (Bohnet et al 2015).
Bazerman,M. H., & Moore, D. A. (2009). Judgmentin managerial decision making
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Bohnet,I., Van Geen, A., & Bazerman, M. (2015). When Performance TrumpsGender Bias: Joint vs. Separate Evaluation. ManagementScience,62(5),1225-1234.
Heijne,A., & Sanfey, A. G. (2015). How Social and Nonsocial ContextAffects Stay/Leave Decision-Making: The Influence of Actual andExpected Rewards. PlosONE,10(8),1-21. doi:10.1371/journal.pone.0135226
Xiaobo,Y., Hongning, Z., Xiaodong, Y., & Juli, Z. (2015). Impact ofself-framing on decision making: timing matters. Socialbehavior & personality: an international journal,43(4),629-639. Doi:10.2224/sbp.2015.43.4.629