...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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...Similarities. The Social Learning Theory and the Rational Choice Theory are similar in the following ways: According to Theorist Akers, he argued that the Social learning theory and the Rational choice theory share some of the same major elements; especially moral reasoning. I feel that the similarities between the two theories are that the individuals know what they are doing as far as criminal behavior is wrong. I believe one group randomly chooses to do things or commit criminal acts to further their financial gain, just as long as the crime is not too severe and their reward is greater (Rational choice theory). The other group (Social learning theory), they just do whatever they see someone-else doing without really thinking...
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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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...Management process, linear and nonlinear management, ordinary and extraordinary management, rational management, chaos theory Management - from rational management to chaos theory Submitted to Dr. D. Coleman By JJ de Klerk In partial fulfillment of the requirement for the Doctorate in Business Administration Swiss Management University March 3, 2012 1 1. Introduction Developments over the last few decades have led to a new way of thinking in economic and management approaches. The scientific approach to management, which emphasizes the basic management functions of planning, organizing, leadership and control, now seems unable to explain the era of change that characterizes economies and organizations alike. This paper will focus on explaining the rational management model, focusing on ordinary management, and go on to discuss the new approaches such as chaos theory – also called complexity theory - and the need for extraordinary management and innovation. 2. Rational management Management and organization science literature have until recently focused on the objective control of agents and worked on the assumption that interactions can be described in linear terms (Webb, 2005). When difficult decisions have to be made, many managers and strategists rely on the economics view in which profit maximization is the guiding principle. Executives will us the rational model tools described above, and believe that precise solutions should be achieved through precise...
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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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...Social Influence of Crime Stu Dent CJA/384 28 October 2012 T. Cher Social Influence of Crime Organized crime has been a research topic in criminal justice for many reasons. It appeals to researchers because of the variables that are involved in defining why organized crime exists and how it has been as successful as it has been. With all of this research comes a series of theories on how organized crime works and how society can benefit from understanding these concepts. Reviewing and defining a few of these theories will assist in understanding theories of organized crime. Among the foundation of organized crime is the idea that it is a social institution. Common examples of a social institution include schools, churches, sporting leagues and the work place. These are institutions that allow for social gathering and influence. However, a social institution can be defined as more than that. It does not have to be an actual building or infrastructure to physically gather in. Instead, a social institution is a set of social norms that establish the collective value of the society. It is not just the place to be social, but also the ideas that bond the group together and create that environment (Walker, 2011). In keeping with this idea, social institution has had a large impact on organized crime. In some ways, this social institution has created the environment for organized crime to grow and be successful. For example, the prohibition of alcohol in the early 1900s is...
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...contesting approaches to reveal the level of impact they offer to the decision-making process. We will begin with an in-depth look at both the garbage can model and the theory of bounded rationality. In the process, we will place an increased emphasis on researcher Herbert Simon, the researcher credited with founding the bounded rationality, as well as the unique psychological perspective that led him there. By highlighting the shortcomings of these two theories, we will reveal...
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...ubyuhb hu b Under this form of ethics you can't justify an action by showing that it produced good consequences, which is why it's sometimes called 'non-Consequentialist'. The word 'deontological' comes from the Greek word deon, which means 'duty'. Duty-based ethics are usually what people are talking about when they refer to 'the principle of the thing'. Duty-based ethics teaches that some acts are right or wrong because of the sorts of things they are, and people have a duty to act accordingly, regardless of the good or bad consequences that may be produced. Some kinds of action are wrong or right in themselves, regardless of the consequences. Deontologists live in a universe of moral rules, such as: It is wrong to kill innocent people It is wrong to steal It is wrong to tell lies It is right to keep promises Someone who follows Duty-based ethics should do the right thing, even if that produces more harm (or less good) than doing the wrong thing: People have a duty to do the right thing, even if it produces a bad result. So, for example, the philosopher Kant thought that it would be wrong to tell a lie in order to save a friend from a murderer. If we compare Deontologists with Consequentialists we can see that Consequentialists begin by considering what things are good, and identify 'right' actions as the ones that produce the maximum of those good things. Deontologists appear to do it the other way around; they first consider what actions are...
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...Game Theory Background An Illustrative Example Course Structure Introduction to Game Theory Econ 414 Jeff Borowitz Summer I 2010 Jeff Borowitz Introduction to Game Theory 1 / 18 Game Theory Background An Illustrative Example Course Structure Rational Choice What is Game Theory? Game Theory is really “Multi-Party Decision Theory” Outside of game theory, we think of just one actor (firms maximizing profits, workers deciding how much to work, etc.) Decisions involving many parties are very relevant to economics Oligopoly Public Goods Working together on a team project Jeff Borowitz Introduction to Game Theory 2 / 18 Game Theory Background An Illustrative Example Course Structure Rational Choice What is a game? Formally A game consists of Players The actions that the players can take How much each player values each potential outcome What each player knows Definition (A Game) A game Γ = (S, U) is a list of possible actions by each player S = (S1 , S2 , . . . , Sn ), and a list of payoff functions for each player under all possible combinations of actions by each other player U = (u1 (S), u2 (S), . . . , un (S)) Jeff Borowitz Introduction to Game Theory 3 / 18 Game Theory Background An Illustrative Example Course Structure Rational Choice What is a game? Informally Games Fantasy Football (drafting, picking line-ups depend on what others do) Rock-Paper-Scissors Risk Not Games Football (depends on skill, strength...
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...Victimization Theory | Summarize the theory of victimization, describing its meaning and core concepts as it relates to the nature of crime. | Identify subcategories of the theory and describe each. | Apply the theory to one (1) real life example or scenario. Briefly explain why the theory applies to the example you identified. | Rational Choice Theory (This theory is completed for you as an example of how to complete the remaining theories) | According to this theory, crime is a matter of personal choice and the criminal makes a rational decision to commit the crime. This view is that If a person is motivated, considers the choices, and they believe crime will benefit them without risk. (Siegel & Worrall, 2013, p. 45)This view is that for the criminal, the profit outweighs the punishment. | One sub-category is the “Deterrence Theory” which aligns itself by indicating crime would not be a “rational choice” therefore not chosen if there was a strong enough fear of punishment, acting to deter the criminal activity. (Akers, 1990, p.2) | One real life case was that of Ariel Castro. This is the nationally televised case of a man who kidnapped and held three (3) women captive in his Cleveland, Ohio home for over 10 years, during which he physically and sexually assaulted, fathered a child and kept these young women captive until one managed to escape 2013. Castro pleaded guilty to 937 counts including murder, rape, and abduction, to avoid Ohio’s death penalty. He was sentenced...
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...Game theory is a concept of decision making that considers more elements beyond just benefits minus costs. Specifically, it includes the interaction between participants. In economics, the theory attempts to predict the participants’ optimal decisions. It has found a core place in economic decision-making and policy-making for its inherent ability to predict reactions in resource allocation, business negotiation, and other economic aspects. Game theory is mostly associated with decision-theory and other contexts such as cooperation and negotiations. From its definition, it is evident that the game theory is largely used in the study of the human decision making processes. In psychology, its equivalent is known as the theory of social situations. In economics, however, game theory tends to focus on sets of outcomes known as equilibrium that represent the most rational solutions to each situation. Game theory emanates from the complexity of human interactions; thus, in a situation where an individual is dealing with an inanimate object such as a tree, he or she does not expect the tree to fight back or respond (Leyton-Brown and Shoham 51). The environment can also be considered neutral to what is done to the tree, at least in direct and rational response. In human interactions, however, each action by an actor emanates from a situation and elicits a response. Each actor must thus recognize how his of her interaction with other rational actors works so as to foster cooperation...
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...discussions on the topic of fraud, theft, proper weights, and competition; in the New Testament business ethics as it relates to poverty and wealth are discussed (Hoffman, Frederick, & Schwartz, 2001, p. 3). In current times the discussions of Business Ethics is moving towards a different approach. There will always be organizations more concern about the financial interest of the shareholders than the consumer; however, there is now a growing interest among US companies to corporate social responsibility as a way to benefit both the community and the organization. This paper will briefly compare and contrast the various theories of economic Justice of Fairness, Distributive Justice, Utilitarianism, Capitalism and Morality, and Socialism; and reveal the one theory I believe to be the most practical; and the best theory of economic justice as it applies to the “fairness in hiring and promotions, and employees’ rights and duties.” Justice of Fairness includes components of the Principle of Liberty that every one deserve the right to basic liberties; and the Principle of Equality falls in line with the distributive justice for social and economic liberties to be arranged so that they are the greatest benefit of the least advantaged and fair equality of opportunity. Rawls’ point of view on the Justice as Fairness is to be fair and impartial in making decisions about fundamental principles of justice. In order to adopt this point of view is to insure impartiality of judgment...
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...All of economics is meant to be about people’s behavior. Behavioral Economics is a field of economics that studies how the actual decision-making process influences the decisions that are reached. The standard economic theory is known as neoclassical economics. Neoclassical economics stops short of trying to explain where people’s preferences come from, but it does not take account of the direct influence of other people’s behavior and social standards on our behavior. The theory imagines we independently know what we want and that our preferences are permanent. This standard theory is very good at explaining short-term decision-making (I want green vegetables and choose beans as they are on special offer) but cannot explain longer-term changes in preferences (I now only choose organic food). Along the same lines the importance of institutions – both formal institutions such as regulations, and informal ones, for example, how people organise markets – and the evolution of the whole economic system are not subjects of neoclassical analysis. This has significant implications Behavioral economics has evolved to be a separate branch of economic analysis which applies scientific research on human and social, cognitive and emotional factors to better understand economic decisions by consumers, borrowers, investors, and how they affect market prices, returns and the allocation of resources. Behavioral economics is that branch of one, which deals with the study and application...
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...arresting the abuser, and the social understandings of abuse affects personal values and principles. Taking in the social understandings of other beings, whether that be a person or an organization, becomes internalized and projected outwards. Policies directed towards ending or reducing IPV must recognize and understand the institution that makes it thrive and resistant to change. Furthermore, policies must understand the cyclical nature of the pillars—our personal engrained values and beliefs affect our actions as well as others that then influence policies and enforcement. While many of the structures discussed exist in older abuse discourse, it would be illogical to suggest it no longer lingers within society as it is today. Rational Choice...
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...EFFICIENT MARKETS HYPOTHESIS AND OTHER THEORIES OF PRICING IN FINANCIAL MARKETS Name Course Title/Code Instructor’s Name Date Efficient Markets Hypothesis and other theories of pricing in financial markets Efficient market hypothesis (EMH) is a theory that emerged in the 1960s. It states that it is difficult to predict the market since the price has been set and reflect the current market conditions. It is a disputed and controversial theory. The theory is comparable to other theories of pricing in financial markets. Several strengths and shortcomings emerge through comparison with other theories of pricing (Blinder, et al., 2012). EMH states that no stock is a better buy when compared to others. It is the conclusion that leads to random choices. It is a vital tenet of finance theory. The EMH theory has a basis in other finance theories. It follows the classical theory of asset prices. To determine the connection, a situation where stocks are considered based on good deals. According to the EMH theory, these stocks are worth more than their relative prices. The worth of a stock is the present value of the expected dividends. In this regard, an individual will buy stocks at prices that are below this level. In essence, this is buying stocks that are undervalued assets (Kapil, 2011). Classical theory The classical theory follows the belief that the price of a stock is equal to the best estimate of the stock’s value. This equality means that the undervalued stocks are not real...
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