- (20 points) Ariely’s main point is that we are pawns in a game whose forces we largely fail to comprehend. Indeed, we do not really learn from our mistakes. Instead we are predictability irrational. With this as background, I want you to answer the question of why do not we not learn from our mistakes better?
- (20 points) Read Chapter 11 of the Upside of Irrationality, “Lessons from Our Irrationalities: Why We Need to Test Everything”. Then answer this question: Why are we so resistant to testing our ways of doing things? Consider the example of leeches in this chapter. Or how we teach the same material over and over again in finance even though it does not seem to work in reality. Or how Ariely found that the nurses would rip the bandages off very fast rather than test to see what worked better.
- Read Chapter 2 of the Upside of Irrationality “The Meaning of Labor: What Legos Can Teach Us About the Joy of Work”. Then I want to answer the following questions:
A. (5 points) Why do we need so much meaning at work?
B. (5 points) Why are the economic models so wrong?
C. (10 points) What we have learned in the class is so many things in finance are not quantifiable. These include social norms, emotions, meaning, etc. Yet in finance, we love things that quantify risk like Value at Risk or mark to market accounting (which as we saw can be really flawed). Why are we so seduced by numbers and put off by qualitative things in finance and economics?
- (20 points) There is a video on amazon called “The Inventor: Out of Blood in Silicon Valley”(you can watch on amazon or HBO but I don’t think you have to watch the entire video to understand my question). The video is about Theranos and its founder Elizabeth Holmes. You will see that so many smart people fell for Theranos and invested lots of money into the company. The same can be said for Enron, or Bernard Madoff or countless other examples. My question is why? Why are smart people so easily fooled? Use the biases we have learned in class (particularly the availability bias) to answer this question.
- (20 points) One criticism that is levied against traditional economic and finance models is that they are often formulated as if the typical decision maker were an individual with unlimited cerebral RAM. Such a decision maker would consider all the relevant information and come up with the best choice. However, we know from this course that normal human beings are imperfect. And the information requirements for these models are totally egregious. Consider CAPM for a moment. This model assumes that investors are capable of studying the universe of securities in order to come up with all required model inputs. These inputs include expected returns and variances for all securities, as well as the co-variances among all securities. My question to you is why do we do this in finance? Why do we create models that people really cannot follow? Why do we assume people can do all these calculations? Why does assume we are so rational? Indeed, I mentioned the example of Harry Markowitz, the founder of Modern Portfolio Theory, who uses regret theory than his own modern portfolio theory to come with his allocations in his retirement portfolio.
Compelling correspondence is essential to the achievement all things considered but since of the changing idea of the present working environments, successful correspondence turns out to be more troublesome, and because of the numerous impediments that will permit beneficiaries to acknowledge the plan of the sender It is restricted. Misguided judgments.In spite of the fact that correspondence inside the association is rarely completely open, numerous straightforward arrangements can be executed to advance the effect of these hindrances.
Concerning specific contextual analysis, two significant correspondence standards, correspondence channel determination and commotion are self-evident. This course presents the standards of correspondence, the act of general correspondence, and different speculations to all the more likely comprehend the correspondence exchanges experienced in regular daily existence. The standards and practices that you learn in this course give the premise to additionally learning and correspondence.
This course starts with an outline of the correspondence cycle, the method of reasoning and hypothesis. In resulting modules of the course, we will look at explicit use of relational connections in close to home and expert life. These incorporate relational correspondence, bunch correspondence and dynamic, authoritative correspondence in the work environment or relational correspondence. Rule of Business Communication In request to make correspondence viable, it is important to follow a few rules and standards. Seven of them are fundamental and applicable, and these are clear, finished, brief, obliging, right, thought to be, concrete. These standards are frequently called 7C for business correspondence. The subtleties of these correspondence standards are examined underneath: Politeness Principle: When conveying, we should build up a cordial relationship with every individual who sends data to us.
To be inviting and polite is indistinguishable, and politeness requires an insightful and amicable activity against others. Axioms are notable that gracious “pay of graciousness is the main thing to win everything”. Correspondence staff ought to consistently remember this. The accompanying standards may assist with improving courtesy:Preliminary considering correspondence with family All glad families have the mystery of progress. This achievement originates from a strong establishment of closeness and closeness. Indeed, through private correspondence these cozy family connections become all the more intently. Correspondence is the foundation of different affiliations, building solid partners of obedient devotion, improving family way of life, and assisting with accomplishing satisfaction (Gosche, p. 1). In any case, so as to keep up an amicable relationship, a few families experienced tumultuous encounters. Correspondence in the family is an intricate and alluring marvel. Correspondence between families isn’t restricted to single messages between families or verbal correspondence.
It is a unique cycle that oversees force, closeness and limits, cohesiveness and flexibility of route frameworks, and makes pictures, topics, stories, ceremonies, rules, jobs, making implications, making a feeling of family life An intelligent cycle that makes a model. This model has passed ages. Notwithstanding the view as a family and family automatic framework, one of the greatest exploration establishments in between family correspondence centers around a family correspondence model. Family correspondence model (FCP) hypothesis clarifies why families impart in their own specific manner dependent on one another ‘s psychological direction. Early FCP research established in media research is keen on how families handle broad communications data. Family correspondence was perceived as an exceptional scholastic exploration field by the National Communications Association in 1989. Family correspondence researchers were at first impacted by family research, social brain science, and relational hypothesis, before long built up the hypothesis and began research in a family framework zeroed in on a significant job. Until 2001, the primary issue of the Family Communication Research Journal, Family Communication Magazine, was given. Family correspondence is more than the field of correspondence analysts in the family. Examination on family correspondence is normally done by individuals in brain science, humanism, and family research, to give some examples models. However, as the popular family correspondence researcher Leslie Baxter stated, it is the focal point of this intelligent semantic creation measure making the grant of family correspondence special. In the field of in-home correspondence, correspondence is normally not founded on autonomous messages from one sender to one beneficiary, yet dependent on the dynamic interdependency of data shared among families It is conceptualized. The focal point of this methodology is on the shared trait of semantic development inside family frameworks. As such, producing doesn’t happen in vacuum, however it happens in a wide scope of ages and social exchange.
Standards are rules end up being followed when performing work to agree to a given objective. Hierarchical achievement relies significantly upon compelling correspondence. So as to successfully impart, it is important to follow a few standards and rules. Coming up next are rules to guarantee powerful correspondence: clearness: lucidity of data is a significant guideline of correspondence. For beneficiaries to know the message plainly, the messages ought to be sorted out in a basic language. To guarantee that beneficiaries can without much of a stretch comprehend the importance of the message, the sender needs to impart unmistakably and unhesitatingly so the beneficiary can plainly and unquestionably comprehend the data.>