Loss Aversion and Its Effects False Impact in Decision Making Research Paper

Loss Aversion and Its Effects False Impact in Decision Making - Research Paper Example â€Å"People’s choices are often prediction-based about how different results will make them feel† including loss aversion. Naturally, people tend to trust that the effects of all the losses are superior to hedonic effects of a similar-sized gain. If these people are right that the irregularity of the foretold feedbacks to debts and credits matches true irregularity in real reactions to credits and gains, then they would be right and wise to avoid losses, if they are positive that the asymmetry of predicted reactions to losses (Deborah, Kermer; Erin, Driver-Linn, and Gilbert, Daniel). We acknowledge the fact that losses might have a larger hedonic impact compared to gains, but it is not so the case at all times. Even though the brain appears to processes negative events in different other regions compared to the positive events while triggering more concentrated neural activity than when it processes positive, but this does not mean that loss aversion always affects peo ple’s decision. Sometimes people trivialize negative results by persuading themselves that these negative outcomes will improve and will not be exceedingly damaging. This has led to the conclusion that not all people are negative. It is not a fact that all people are loss averse. It sometimes seems that people have learnt from experience that losses have less emotional impact than they predicted to have. However, studies showed that a number of impediments such as learning. As noted, a large number of psychological defences ensue outside of conscious alertness, making their anticipation difficult to observe. Further, for correct prediction, individuals have learnt to recognize how they recently reacted to a similar and previous occasion, and further, gotten to predict correctly. People have recognized experiences simulating how they are reacting. Individuals have mug up that loss has less emotional effect than what they predicted. They have learnt that these losses have less emotional effect than what they predicted due to facing repeated losses in the exact area over a short time. The theory of loss aversion does not apply at all times. It is not necessary that one bases his decision making on loss aversion. Research has shown that despite the fact that people try to make their decision on the fear that they might lose something and fall in a deep set back full of regret, they also try to link it to a past situation where a similar event happened, and the turnout was different. In contradiction to the theory of loss aversion, an experiment conducted on the reaction of people when they have lost $100. The rules of the experiment were whether the participants were ready to gamble to take another round and risk gaining the $100 back or falling $200 down. Though most people would quit and end the game at being $100 down, others will take the gamble of gaining their $100 back or falling another $100 down because the risk is a 50-50. Comprehending that the r isk of falling down another $100 is 50 and the risk of gaining back their $100 are also 50; they will go ahead and try regaining it. Not all the individuals are get affected with the anxiety of the loss affecting them emotionally and impeding their vision to make soundness decisions (Deborah, Kermer; Erin, Driver-Linn, and Gilbert, Daniel). An argument that there might be a forthcoming negative outcome is presented. This argument is feasible in

Negotiation plan Essay Example | Topics and Well Written Essays - 1000 words - 1

Negotiation plan - Essay Example (2005), sufficient preparation provide the opportunity to clearly describe the goals, recognition of core issues, understanding of parties involved and to assess the effectiveness of the strategies adopted for the negotiation. It is the successful preparation phase which ensures that delegation moves closer to the success as defined by the objectives of negotiation. Following is the preparation plan for negotiation of a Dairy Company XYZ with the employee union, the number of permanent and full time employees exceeds one hundred and all of them are members of this union. They approached the management with some demands and issues, several meetings were held and many issues were resolved but the parties still have differences on some of the crucial issues. Both the parties are eager to finalize the issues and differences in the upcoming meeting. As the leader of the delegation from the Dairy Company, I propose the following negotiation plan. Most of the issues including pay rates, classification structure, number o annual leaves, daily break for meal etc have been resolved in the previous meetings. Among five issues that require resolution in the next meeting include: The goal of the group is to achieve agreement on the three core issues including the life of the agreement, factors that will serve as basis for the increase in wages and hour’s roster. The union demands that the agreement should be for one year, wages should be increased according to the increase in the inflation and increase in the output from the beginning of the year 2011 to till date and roster hour should be set to 152 hours per four weeks cycle. The goals set by the group are to fix the agreement life for three years; wages should be increased with productivity rather than inflation and increase should be from the start of the agreement while the roaster hour should be flexible and company can change it on a notice of two days as compared to the five days demanded by the Union. The life