Podcast
Questions and Answers
According to the study by Wiggins and Ruefli, what percentage of companies achieved superior performance lasting 10 years?
According to the study by Wiggins and Ruefli, what percentage of companies achieved superior performance lasting 10 years?
- 5% (correct)
- 1%
- 0.5%
- 32%
Which of the following is a key insight from the Closed Experiment II?
Which of the following is a key insight from the Closed Experiment II?
- A higher amount of potential winnings leads to a higher expected utility.
- The difference between 61% and 63% chance of winning has a significant impact on decision-making. (correct)
- A higher probability of winning leads to a higher expected utility.
- The difference between 520,000 and 500,000 baht has a significant impact on decision-making.
What is the main implication of the study on the lifespan of small and large firms?
What is the main implication of the study on the lifespan of small and large firms?
- Small firms have a shorter lifespan than large firms, but the difference narrows after a few years. (correct)
- Small firms have a longer lifespan than large firms.
- Large firms have a significantly longer lifespan than small firms.
- The lifespan of small and large firms is approximately the same.
According to Prospect Theory, which of the following is a characteristic of human behavior under uncertainty?
According to Prospect Theory, which of the following is a characteristic of human behavior under uncertainty?
What is the primary goal of a rational decision-maker in Game Theory?
What is the primary goal of a rational decision-maker in Game Theory?
In the context of Closed Experiment III, which lottery ticket would a risk-neutral individual prefer?
In the context of Closed Experiment III, which lottery ticket would a risk-neutral individual prefer?
What is the main idea behind Framing Effects in decision-making?
What is the main idea behind Framing Effects in decision-making?
According to the study by Wiggins and Ruefli, what percentage of companies achieved repeating excellence?
According to the study by Wiggins and Ruefli, what percentage of companies achieved repeating excellence?
What is the primary goal of a decision-maker in Utility Maximization?
What is the primary goal of a decision-maker in Utility Maximization?
Which of the following is a key concept in Prospect Theory?
Which of the following is a key concept in Prospect Theory?
Study Notes
Decision-Making and Rational Behaviour
- The Ultimatum Game involves a proposer and a responder, where the proposer divides 1,000 baht and the responder accepts or rejects the proposal.
- If the responder accepts, both parties receive the proposed amount; if rejected, both receive nothing.
Consumers' Rational Behaviour
- The concept of indifference curve or maximizing utility is used to analyze consumers' rational behaviour.
- Three axioms characterize rational behaviour: completeness, transitivity, and reflexivity.
Economic Models
- The economic model of human rationality includes dynamic, stochastic, and general equilibrium models.
Business Management
- Only 5% of companies achieve superior performance lasting 10 years, and less than 0.5% achieve it for 20 years.
- The average lifespan of small firms is shorter than large ones, but the difference in survival rates narrows significantly after the first few years of existence.
- It is very hard to build a successful long-term business, and competitors can try different strategies.
Decision-Making under Uncertainty
- In a lottery ticket scenario, individuals are indifferent between two tickets with different probabilities of winning the second prize or the last-two-number prize.
- The same scenario is repeated with different probability values to test decision-making under uncertainty.
Lotteries and Decision-Making
- Two lottery tickets are offered with different probabilities of winning: 61% chance to win 520,000 baht or 63% chance to win 500,000 baht, and 98% chance to win 520,000 baht or 100% chance to win 500,000 baht.
- The decisions made in these scenarios are used to analyze decision-making under uncertainty.
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Description
This quiz assesses decision-making skills in the context of lottery tickets with different prizes. It explores indifference between tickets and willingness to sell them at a certain price.
