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Daniel Kahneman, who won the 2002 Nobel Memorial Prize in Economics for his work developing prospect theory. Prospect theory is a theory of behavioral economics, judgment and decision making that was developed by Daniel Kahneman and Amos Tversky in 1979. [1]
One detailed application of mental accounting, the Behavioral Life Cycle Hypothesis posits that people mentally frame assets as belonging to either current income, current wealth or future income and this has implications for their behavior as the accounts are largely non-fungible and marginal propensity to consume out of each account is different.
The foundation of behavioral finance is an area based on an interdisciplinary approach including scholars from the social sciences and business schools. From the liberal arts perspective, this includes the fields of psychology, sociology, anthropology, economics and behavioral economics.
Equity theory has been widely applied to business settings by industrial psychologists to describe the relationship between an employee's motivation and his or her perception of equitable or inequitable treatment. [citation needed] In a business setting, the relevant dyadic relationship is that between employee and employer.
Marginalism is a theory of economics that attempts to explain the discrepancy in the value of goods and services by reference to their secondary, or marginal, utility. It states that the reason why the price of diamonds is higher than that of water, for example, owes to the greater additional satisfaction of the diamonds over the water.
Kurt Lewin, a social psychologist, was influential in developing a systems perspective with regard to organizations. He coined the term "systems of ideology," partly based on his frustration with behaviorist psychology, which he believed to be an obstacle to sustainable work in psychology. [68]
Within economics, margin is a concept used to describe the current level of consumption or production of a good or service. [1] Margin also encompasses various concepts within economics, denoted as marginal concepts, which are used to explain the specific change in the quantity of goods and services produced and consumed.
In statistics, the principle of marginality, sometimes called hierarchical principle, is the fact that the average (or main) effects of variables in an analysis are marginal to their interaction effect—that is, the main effect of one explanatory variable captures the effect of that variable averaged over all values of a second explanatory variable whose value influences the first variable's ...