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M5 Economics_Decision-Making in Managerial Economics Values,…

- - - - e.g.Milk, bread
  - - - Prepared food near the rear
        
        e.g. Bakery
    - - e.g. Romantic music
  - - - e.g. Magazines, chewing guns
    - - Prestigious brands
    - - Right-hand side at eye-level selection; healthier foods on the left of less healthy ones
  - - - e.g. Cooking oil or litter close to food
- - - - Behavior is determined to a substantial extent by motives
      - Many people in Western culture start out trusting and benevolent and reciprocate both good and bad behaviors. Many people have the propensity to punish, even at some costs to themselves, misbehaviors of one stranger toward another stranger
      - "Rational fools", "Opportunistic with guile" , is constrained by others, who care about being treated fairly
    - - Assumption?
        
        Approximation made in the belief that departures from nationality
        
        Preferences that violate expected utility theory but have considerable normative appeal
        
        Preferences were affected predictably by the farming of decision problems, or by the procedures used to elicit preferences, which demonstrated the susceptibility of people to framing effects violates a fundamental assumption of invariance, which has been labeled extensionality and consequentialism
        
        Unlike the paradoxes fo expected-utility theory, violations pf invariance cannot be defended as normative
      - Model departures from economic rationality; rationality models continues to provide framework even for these models, in which the agents are "fully national, expect for ..."
        
        Traders believe they are above average
        
        Traders are myopic{近視的} and loss-averse
        
        Traders are too quick to jump to conslusions
        
        Discounting is quasi-hyperbolic{雙曲線的}
        
        Self-control is an acknowledged problem
    - - Reference indenpence
      - Expected-utility theory
      - Loss-aversion/ Riskless choice
        
        The response to losses is consistently much more intense than the response to corresponding gains
    - - Psychological theory: more and more accepted
        Economics: stable, but overly simple; tractable{易處理的} analysis, but two consequences 1. can not stray too far away from the original set of assumptions 2. theoretical innovations noncumulative