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Deliverable Length: 2 pages

There are three (3) parts to this project. Your research paper should address each one fully and thoroughly.

Part 1: Review each situation (there are FIVE scenarios within the activity) and identify the applicable decision concept (you may select from any theory, principle, model, etc. from our learning in Unit 2) that you believe to be present. Make sure you also explain (for each concept identified) "how" and "why" you arrived at your conclusion. In other words; what information helped you select each concept for each situation? Be sure you separate your findings and support for each of the different scenarios (don't put all your findings & support in a single block paragraph).

Part 2: Look at the different decision concepts you identified in part 1. What do you think those different concepts imply about how people make decisions?

Part 3: Do the decisions we make always need to be rational? Under what circumstances are we (decision makers) likely to make irrational choices?



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The response addresses the queries posted in 764 words with references.

//As per the directions, we will talk about the various situations. In this part, we will discuss 'situations'. Under the first situation, we will discuss the 'expected return'. On the other side, under the second situation, we will talk about the motive of the Investors.//

Decision Making Concepts

Part 1

Activity 1

First Situation: Though the expected return is more in the second available alternative, yet most of the people have chosen the first alternative because it has a surety that the amount will be received. As the second alternative has the probability of getting even $0, people are trying to adopt the secure income theory. They are opting for the first alternative as they do not want to loose money. With the assistance of such a decision making by the people, I was able to arrive at this conclusion. They prefer the first alternative because they favor guaranteed money rather than the probabilistic return.

Second Situation: The main motive of the people is to maximize their return. It is causing the selection of the second alternative by most of the people. Both the alternatives do not include any type of the guaranteed income that is the main reason for choosing second alternative. This decision includes the maximizing profit theory. I will choose the same alternative in the second situation as it is providing $250,000 while the first alternative provides only $110,000, which is less than the second alternative. Both the alternatives are identical and providing the same benefit in both the situations. The decision is based on ...

Solution Summary

The response addresses the queries posted in 764 words with references.