Affect Of Attitudes To Risk On Decision Outcomes Essay

Affect Of Attitudes To Risk On Decision Outcomes - Essay Example Individuals tend to take bigger risks if they have a big amount of wealth in their portfolio. Normally, where there is a high risk in an investment, it is probable that the payoff tends to be bigger, and where the risk is small, the payoffs tend to be smaller. Due to this reasons, individuals with massive wealth in their portfolio tend to be riskier so as to maximize their payoff. This type of individuals mostly is driven by their ambition to acquire more wealth in the future. Thus, they take a bigger risk in their investments because even if they lose out because of an unsuspected market condition, their wealth always cautions them and thus they have little to fear.Another individual factor that impacts the attitude on risk on the decision outcomes is the knowledge from the market that mostly is bought from the consulting and experts firms in the market. These firms gather, analyze and predict the future market condition and thus they can advise managers on the riskiness when undert aking certain projects and investments. Knowledge from the experts helps individuals to make informed and proper decisions that have a positive impact on the expected outcomes. Although the perfect information is costly, it saves a great deal as opposed to having no information at all. When one has the knowledge, he or she has power, and it is only right that he uses it for the betterment of his decisions and judgment.Another individual factor that affects the risk attitudes on decision outcomes is the earlier periods' outcomes.

Causes and Consequences of the Great Depression Essay

Causes and Consequences of the Great Depression - Essay Example This write-up will discuss events which contributed to this economic crisis and its consequences. The events that resulted in this calamity include poor economic policies, malpractices and increased tariffs (Ross 1998, p. 183). In the late 1920s, there were no adequate regulations which governed trading in America’s stock exchanges. Consequently, traders exploited these shortcomings to their benefit. Overall, the investors’ funds were vulnerable to unscrupulous traders. Unscrupulous trading in the stock market was one of the triggers of stock market failure. Subsequently, the values of shares began to plunge. The decrease in the value set off events in other industries, which culminated in this economic calamity. However, historians and economists argue that the decrease in the value of stocks in the market was not the cause, but a symptom of an impending economic calamity. Decreased market confidence resulted from the general failure in entities, poor policies such as increased taxation and dismal performance of other industries. According to economists, the collapse of markets denotes the final symptom of an eminent economic calamity. Although the collapse of the stock market may be a symptom rather than a cause, the resultant panic caused rapid deterioration of the economy in both America and the globe (Robbins 1971, p. 90). It is vital to realize that the great depression was a culmination of the coupling of various factors. Such factors included unfavourable tariffs. There was a general rise in the tariffs to finance the governmental operations. However, the higher taxes resulted in the government having more funds. During this period, governments undertook rearmament programmes. Subsequently, vital industries did not receive appropriate funding to stimulate the economy. Despite the imperialist policies adopted by nations, there were positive attributes from nations spending massively on defence programmes. Government globally were able to em ploy additional workforce. The massive defence expenditure did not improve the economy. Therefore, it denied the economy vital resources that would have improved nations further. The military ambitions were realized at the expense of the global economy (Lied 2002, p. 234). During this era, the international trade was not properly developed. Additionally, the emergence of global alliances hindered trade further. Globalization was inexistent; hence, economic panic due to failure of stock markets in America resulted in an economic calamity. If international trade had been properly developed, it would have mitigated the impact of the Great Depression. It would have provided optimism in the economic sectors globally. However, the existing global alliances, which pitted Germany and the United Kingdom (UK) against each other, only made the situation dire (Smiley 2002, p.153). Countries only traded in their alliances; thus, there was minimal business among nations such as the UK and Germany , which represented the global economic forces. Such enmity hindered trade among nations that would have mitigated the depression. Global politics had massive implications on the depression. Proper politics would have enacted measures that would have encouraged economic improvements. However, the political stands during this era resulted in further degradation of the economy (Klein 1947, p.157). The Great Depression was global; hence, there were numerous factors which triggered its occurrence. While the collapse of the