...The primary assumptions of Rational Choice Theory, is the beliefs that “human beings are rational and self-interested beings who are affected by the consequences of their actions” (Miller, 4). It is said that a person considers reason to their actions, such as: opportunities; the results that may come of the actions (advantages), costs, benefits. A person is capable of finding reasons to support their actions or at least try to create something to make them feel like the decision they make is justifiable; “rational choice theorists is not that individuals are purely rational in their decision making, but rather that they do consider the costs and benefits” (Hagan, 116). Miller (2009), said that “various costs and benefits that are considered by the would-be offender are the subjective ones” (p. 8), in other words, a soon to be offender will choose to commit an offense after...
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...Laroche being prescriptive and descriptive Laroche follows a prescriptive method in arguing for decision making theory. He argues it is a social representation which will improve decision making. In his abstract he writes “The paper argues that […] the concept of organizational action should not be opposed to decision and decision-making. Decision and decisionmaking are best understood as social representations […]. As organization members think and act in terms of decision-making, a theory of organizational action cannot simply do without a theory of decision-making. “ showing clearly that he is prescribing a certain way of looking upon decision-making. This is further strengthened in the conclusion where he for example writes “This paper argued that decision-making is best understood as a process of reality creation through organization members’ representations of their own role and activity.” The extent to which Laroche is prescriptive is debatable however. He acknowledges descriptive factors such as when he claims in conclusion that “no theory of action can develop without integrating the fact that, to a significant extent, organizational members think and act in terms of decision-making... a relevant phenomenon for a theory of action, not a marginal one”. He lists examples from empirical studies in describing the decision-making process: “bureaucratic processes (e.g., Cyert and March 1963, Carter 1971), political processes (e.g.. Bower 1970), psychological...
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...Introduction The theory of bounded rationality is one that been a cause for discussion in economist circles around the world for many years. The theory, originally coined by Hebert Simon surrounded the limitation of humans to process the amount of information available to make a logical, economic decision and the consumer would therefore, settle for something that satisfyingly sufficient, or ‘satisfice’(Simon 1955). Furthermore, the theory expanded over time to also include mans use of heuristics to simplify cognitive effort in the decision making process (Simon and Newell 1972) and it was argued that ‘logical and economic’ decisions were never reached by humans due to emotions and judgement controlling the decision making process and causing a range of biases and errors (Tversky and Kahneman 1986). The theory identified that humans would use these heuristics, such as rule of thumb or an estimation, to find something that is satisfactory to their needs rather than making the ideal economic decision. I agree with the notion that the world is ‘too complex for people to solve problems by employing strict logical rules and comprehensive thought processes’ (Simon 1955) and am also of the belief that humans will rely on heuristics to make the cognitive process more straightforward. Rational Consumer Choice Rational consumer choice theory has been around for many years and stems from the ideal that consumers act in a ‘rational’ fashion when making economic decisions. Not as...
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...Chapter 18 A SURVEY OF BEHAVIORAL FINANCE ° NICHOLAS BARBERIS University of Chicago RICHARD THALER University of Chicago Contents Abstract Keywords 1. Introduction 2. Limits to arbitrage 2.1. Market efficiency 2.2. Theory 2.3. Evidence 2.3.1. Twin shares 2.3.2. Index inclusions 2.3.3. Internet carve-outs 3. Psychology 3.1. Beliefs 3.2. Preferences 3.2.1. Prospect theory 3.2.2. Ambiguity aversion 4. Application: The aggregate stock market 4.1. The equity premium puzzle 4.1.1. Prospect theory 4.1.2. Ambiguity aversion 4.2. The volatility puzzle 4.2.1. Beliefs 4.2.2. Preferences 5. Application: The cross-section of average returns 5.1. Belief-based models 1054 1054 1055 1056 1056 1058 1061 1061 1063 1064 1065 1065 1069 1069 1074 1075 1078 1079 1082 1083 1084 1086 1087 1092 ° We are very grateful to Markus Brunnermeier, George Constantinides, Kent Daniel, Milt Harris, Ming Huang, Owen Lamont, Jay Ritter, Andrei Shleifer, Jeremy Stein and Tuomo Vuolteenaho for extensive comments. Handbook of the Economics of Finance, Edited by G.M. Constantinides, M. Harris and R. Stulz © 2003 Elsevier Science B.V All rights reserved . 1054 5.2. Belief-based models with institutional frictions 5.3. Preferences N. Barberis and R. Thaler 6. Application: Closed-end funds and comovement 6.1. Closed-end funds 6.2. Comovement 7. Application: Investor behavior 7.1. 7.2. 7.3. 7.4. 7.5. Insufficient diversification Naive diversification Excessive trading The selling decision...
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...commonly drawn between the “historical” and the “rational choice” variants of institutionalism and shows that there are more points of tangency than typically assumed. However, differences remain in how scholars in the two traditions approach empirical problems. The contrast of rational choice’s emphasis on institutions as coordination mechanisms that generate or sustain equilibria versus historical institutionalism’s emphasis on how institutions emerge from and are embedded in concrete temporal processes serves as the foundation for the second half of the essay, which assesses our progress in understanding institutional formation and change. Drawing on insights from recent historical institutional work on “critical junctures” and on “policy feedbacks,” the article proposes a way of thinking about institutional evolution and path dependency that provides an alternative to equilibrium and other approaches that separate the analysis of institutional stability from that of institutional change. INTRODUCTION Institutional analysis has a distinguished pedigree in comparative politics, and the “new” institutionalist literature of the past two decades has both sustained this venerable tradition and deepened our understanding of the role of institutions in political life. At the same time, recent work has given rise to new debates. It is now conventional to distinguish three different varieties of institutionalism: rational choice institutionalism, historical institutionalism, and...
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...example is taxation to fund public goods such as roads. In such situations, an individual would be better off if she alone were exempt from the tax; she benefits when everyone (including herself) must pay the tax. In this paper, we are concerned with a third form of regulation: paternalistic regulations that are designed to help on an individual basis. Paternalism treads on consumer sovereignty by forcing, or preventing, choices for the individual’s own good, much as when parents limit their child’s freedom to skip school or eat candy for dinner. Recent research in behavioral economics has identified a variety of decision-making errors that may expand the scope of paternalistic regula- Professor Camerer is the Rea and Lela Axline Professor of Business Economics, California Institute of Technology; Professor Issacharoff is the Harold R. Medina Professor of Procedural Jurisprudence, Columbia Law School; Professor Loewenstein is a Professor of Economics and Psychology, Carnegie Mellon University; Ted O’Donoghue is an Assistant Professor of Economics, Cornell University; and Professor Rabin is a Professor of Economics, University of California at Berkeley. Our thanks to participants at the University of Pennsylvania Law School Symposium on Preferences and Rational Choice, the University of Southern California Olin Workshop, the Columbia Law School faculty...
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...The Wire Paper “The Wire” was a television program that aired on HBO from 2002 – 2008. It has received 2 Emmy nominations and is a critically acclaimed program that had received very positive reviews when it was still on the air. The characters on the program, both criminal and judicial, are all well-developed, rounded characters that help to display a realistic view of life in Baltimore, Maryland. One of the criminals on the program is a man named Omar Little. Barack Obama stated that Omar Little was his favorite character on the program: “He is not my favorite person, but he’s a fascinating character– a gay gangster who only robs drug dealers and then gives back. But he’s the toughest, baddest guy on the show, and he’s gay. He’s a fascinating character” (Goldman, 2009, p. 1). After watching several episodes of The Wire, it is easy to see why people like this character, even though he is a known criminal who has committed robbery and murder several times. Omar Little is a homsexual, black male, who is seen spending time with boyfriends, yet, he goes against the gay stereotype of being sensitive, and kind, and is one of the most dangerous criminals in Baltimore. He isn’t afraid to pull the trigger of his gun, and he participates in robberies of dangerous drug lords as well as getting involved in inter-gang rivalries. He displays a passion for poetry, and for Greek mythology (shown in Season 2). For a character like Omar Little to be understood, it is important to realize that...
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...In the Name Of Allah The most Gracious The Most Merciful Assignment No 5: Write a position paper on "We do not admire a person who makes us understand" Or "We admire a person who makes us more confused" Your paper should have at least 1000 words and you should use at least 20 citations from the available academic literature. It may be an essay, an anecdote, an article or some other form of writing. Try to write in simple legible and correct English language. Position Paper: Also called an argument essay. The purpose of a position paper or argument essay is to explain both sides of a controversy and then argue for one side over the other. A position paper or argument essay explains both sides and discusses why one is stronger or better than the other. Answer: TOPIC: We Admire Those People Who Makes Us More Confused “Confusing movies are an integral part of the movie-going experience in general. Without them, everything would make sense and be predictable, and what fun would that be?” 1Malcolm Mathews, 2007.Some of us being human used to admire those people more who make us understand, but what if everything is clear in your mind and no fun to find out new things beyond your boundaries and what if everything is known and process of learning which gives self-confidence and self-aspiration lacks. So, for exploration of new things, ongoing process of learning and development, gaining sense of pride after goal accomplishment, so people who makes us confused is more...
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...Kianna Petty Social Organized Crime Perspective Paper CJA/384 April 12, 2015 Professor Edward Rafailovitc According to Webster II New Riverside University Dictionary definition, social institutions have been identified as groups of people that work together for common purposes or interest, possessing and developing, responsibilities, rights, protections, and objectives distinct different from other members (Webster II New Riverside University Dictionary, 1996).This paper will explore the social institutions as well as their relationship to organized crime, and further explore the empirical or speculative theories that are applicable to organized crime and behavior. Any type of social institutions consists of a group of people who share a desired result. Generally, there are five different types of social institutions. They are political, educational, religious, economic, and family. The average social institution is an organization of people who abide by the laws and follow the general rules and guidelines in a collective manner. These social groups could be a normal club with one thing or goal in common. Some social institutions that most people are familiar with are the Boys and Girl Clubs, the Cub Scouts, and the Girl Scouts. Further, family, school, church, government agencies are not the only social groups, organized crime organizations have adopted the philosophy of social institutions. Organized crime also had people with a vested interest in the business of killing...
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... In this paper, comparisons will be made between bureaucratic and patron-client organizations. In addition, the similarities and differences between the models of organized crime will be examined. The models of organized crime will be analyzed for their importance in the understanding of criminal organizations. The differences between bureaucratic and patron-client organizations are visible as bureaucratic deals with offices that do things by the law. They do not take extensive training in customer service and do not concentrate on being nice. The offices that are being referred to are government offices such as Welfare, DMV, and Section 8. In contrast, patron-client facilities are offices or places that focus upon pleasing their clients because if they don’t, the patron will go to another facility to get their needs met. This brings us to the similarities and differences of the models of organized crime. According to Lyman (2007) there are three theories of organized crime that help in the understanding of criminal organizations. The first theory is the Alien Conspiracy theory, which blames outside influences and outsiders for the rise of organized crime in American society. Second, the Rational Choice theory is when a person weighs the pros and cons of living a certain lifestyle; in addition they also know what the consequences of their actions are as well. Finally, the deterrence theory is one that believes that putting large...
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...Crime One of the best theories best known for methodological approaches would be a rational choice. Individuals are a unit of analysis at which to study society. Society is not made up of a large number of individuals; it can contain organizations and groups. Any general sociological theory is able to tell how the social structure can come into being as well as how they can be maintained. The rational choice theory will explain how the human race behaves for the most part. There are some limits to the theory. Rational choice theory is based on the idea that individuals act for a particular purpose, that is to maximize their utility. In the simplest way, rational choice theory will say the given number of different options that people will do, because they believe that it will have the best outcome. The field of political science rational choice theory is usually used. Rational choice theorists argue that the study of political analysis need not necessarily include every detail of political information, such as dates, names and places, but that an alternative view can offer a distinctive insight into the nature of political life. An assumption made by rational choice theorists is, every human is motivated by self-interest and will figure out their own moves so that they can maximize their own interests. The rational choice theories are more likely to deter property crimes than to violence crimes if increased sanctions are put in play. The increased sanctions will...
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...organized crime. Theories have been developed as to why there is organized crime. This paper will take a look at some of these theories and how they apply to organized crime and criminal behavior. Social Institution Social institution is a group of individuals joining or working together to obtain a common goal. These social organizations could be churches, schools, factories, and non-profit organizations. Organized crime can be looked at as a social organization due to the fact that in many instances the group uses members of the community to sell their product, furnish needed services, and be the consumer. An example of an organized crime organization that could be considered a social institution is gangs, prostitution rings, and drug rings. A social institution does not have to be a legitimate organization. Alien Conspiracy Theory One of the most common theories is the alien conspiracy theory. This theory explains the presence of organized crime is in the United States because it was brought here by immigrants (Lyman, 2007). The Sicilian and Russians are the two favorite. By placing the blame on outsiders or the influence of outsiders, people can make themselves believe that it is not their fault and organized crime would not be here if these foreigners were not here. The immigrants brought their criminal culture and behavior with them when they came to the United States (Mallory, 2007). Rational Choice Theory The rational choice theory believes that...
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...replace rationalism in explaining international political life. Constructivism maintains that identity or norms are causally prior to actors’ interests. Yet when there is conflict between pursuit of interests and maintenance of identity or norms, actors’ strong and well-defined self-interests can overrule their contested or unstable identity or norms. In short, causal arrows can flow in either direction between identity or norms and interests. This implies that rationalism and constructivism are complementary rather than competitive in explaining international political life. International Politics (2015) 52, 110–127. doi:10.1057/ip.2014.41 Keywords: rationalism; constructivism; rationality; norms; identity; international relations theory Introduction Since the 1990s, one of the major debates in International Relations (IR) scholarship has been between rationalism and constructivism (Katzenstein et al,...
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...ANALYSIS OF MARKET COMPETITION, SWITCHING COSTS AND ITS CONSEQUENCES IN TELECOMMUNICATIONS IN NEPAL NAME: SAROJ POUDEL DEGREE: MASTER OF INFORMATION SYSTEMS/MASTER OF INFORMATION TECHNOLOGY COURSE: 7112ICT RESEARCH METHODS IN INFORMATION TECHNOLOGY INTRODUCTION The economics of switching costs and network effects have achieved a significant amount of popular, as well as professional attention in the last few decades. It is presently defined as the core factor for new Information Technology economy. Switching costs originates, if a consumer demands a product, or its related accessories(hardware or software), of his own purchases to be compatible with each other this creates economies of scope among his purchases from a single supplier. Whereas network effects arise when a user wants his system to be compatible so that s/he can interact or trade with other users, or switch to the same compatible system, which leads to the creation of economies of scope between different incompatible products. Thus these economies of scope impacts the consumer’s buying and switching behavior between various products. The state of lock-in arises when the switching cost is sufficiently high so that the consumer proceeds using the same product rather than switching to the different product. Lock in is the state where the cost of switching exceeds the benefits of switching. Economics of switching costs is the summation of various types of switching costs including: compatibility...
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...by: Noha ElZalabani Intake: 40C - Heliopolis Paper Summary: The past two decades have witnessed an influx of new ideas and initiatives in the field of public management in Organisation for Economic Co-operation and Development (OECD) countries, which have led governments to undertake major changes in the way in which the public sector is managed in order to better meet citizen needs within expenditure limits. Anglo-American, Nordic and European Continental countries have come under increasing pressure to improve their efficiency and effectiveness and to reduce their demands on taxpayers while maintaining the quality of services and the welfare state. This paper seeks to acquire a deeper understanding of how some of these new ideas have worked in practice by examining the implementation of strategic management in twenty-three pioneer local governments in Australia, Canada, Spain, Sweden, the USA and the UK, countries which belong to different public administration styles. The goal is to identify both the factors that affect the implementation of strategic management and the advantages brought to the organization. For this purpose, experts' views on the implementation of strategic management systems in local governments have been analyzed, applying the Delphi method. The results will allow a deeper knowledge about the ideal implementation process and the expected benefits which strategic management could entail. This paper was prepared by three researchers from University...
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