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Choices, Values, and Frames 1st Edition
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Top Customer Reviews
The text is somewhat dense at parts, being aimed at economists and psychologists with some mathematical familiarity. However, the portions of the book that require much mathematics can safely be bypassed without losing much of the substance of the text. This text is the most credible presentation of an alternative theory to the rational actor theory usually assumed in economics. For example, some of the articles help explain the magnitude of the equity return premium, or help show how people make choices differently in similar situations based simply on the way the situation is presented.
I would highly recommend this book to anyone interested in decision making theory, especially as it relates to consumer behavior. It is a brilliant volume that includes the most important articles by the leading mind in the field.
People often think of the Kahneman-Tversky behaviorists as "bomb-throwers" in the sense that they appear to love to destroy traditional concepts of rationality rather that put constructive models in their place. This collection, which consists of 42 very high quality essays by the leading lights of the field, shows clearly that this is not the case. Prospect theory, loss aversion, framing effets, status quo effect, and the like are carefully modeled in this book. I came away quite impressed.
It is a shame that Amos Tversky never lived to see the light of day of this fine volume. It is certainly a vigorous vindication of his lifetime research agenda.
The papers, some of them densely mathematical and others written in cogent plain English, demonstrate through experiments and some quite entertaining observations the various layers of logic we use when we make trade-off decisions.
One human skew comes from the way we tend to weigh up uncertainty and risk: and our tendency to vividly imagine downsides while having only a loose picture of upsides.
A second family of biases comes from our tendency to contextualise decisions and choices in different ways: to "reframe" the way we see problems and thus skew our outcomes.
A third family of human biases comes from our many perceptual biases, for example in the way we recall standout features from one sample, and then act as if these standouts (a couple of famous names for example)are representative of the whole sample.
Taken together we get a rich picture of human decision behaviour that is applicable in economics, marketing or - (for example) in the specific worlds of medical professionals who must evaluate data, frame each situation and make critical professional decisions.
This text is important, and provides rich reading for researchers in a wide number of fields.Read more ›
The only weakness of the text is that it assumes that the reader has reasonable literacy in manipulating abstract mathematical concepts. More exposition would have been appreciated here. However, even if one does not understand the more 'mathematical' sections the book as a whole is still an engaging exposition of how humans process decisions under risk and uncertainty.
A 'must read' for anybody seriously interested in, but unfamiliar with, this area of cognitive psychology
Regarding the field of risk management (not the wll street kind, but just regular risk decision making in business) this book is of inestimable value. I have often notices certain biases towards risk aversion or risk taking when business decisions are beign made. Much seemed to be due to the context. This work shows exactly why and how decision bias arises. This is the foundation for the creation of a useful risk decision analytical framework.
The paper of interest to me relate to why people will choose to take or avoid risks that, according to utility theory, are the wrong decisions. For example, why pepole buy insurance even when it is a better financial choice to be uninsured. These works explain why and under what circumstances one's biases override logic. Why this is not a common text on the desk of every risk manager, I will never know.
In this one volume, there is enough information to design an utterly new field of risk management and to solve most every problem one can face. This has become the one reference material that I considre indespensible. throw out the CPCU and ARM texts that you never use and can't bear to read ever again. Chuck them and place this volume in their place and you will be far, far better off.
Most Recent Customer Reviews
Unfortunately these so called "academics" always seem to try to outdo each other in who can put the most amount of long and obscure words together as tightly as possible,... Read morePublished 10 hours ago by Joacim
Not an easy read. This is a collection of technical papers. Popular readers will want to see "Thinking, Fast and Slow" but this (and the companion volume) are vastly... Read morePublished 10 months ago by S D Roemerman
A great collection of seminal papers. Gives a good overview of the field of behavioral economics and the connections between paychology and econ.Published on March 6, 2014 by Avner Shlain
This book (although it's a compilation of articles) has many of the most important work in the area of Psychology and it's full of math explanations. Read morePublished on June 18, 2013 by Felix Kessler
This book arrived on time and in new condition. This book describes a scientific approach to decision making. It is primarily about risk analysis. It is written at a high level. Read morePublished on March 8, 2011 by Mederic W. Roberts
This book will enhance your thinking, and open your eyes to human blind spots. It exposes in a very nice way that we humans make illogical choices, and are not as rational as we... Read morePublished on November 3, 2007 by Rai Chowdhary
Most, if not all who have done financial modeling have made some use of prospect theory in order to assess and measure risk in financial instruments, although this use has yet to... Read morePublished on December 22, 2006 by Dr. Lee D. Carlson
New theme, not always easy to understand but so interesting, a must for a financier.Published on August 8, 2005 by Coulon Yannick