In: Finance
Question 2: (50 marks- 500wards)
The nature of a decision process and its rationality are empirical questions that must be addressed by primary field study, experimental tests, and other means. But whatever your view about the sophistication and rationality of decision making, your models must conform to certain basic principles.
a. Explain the principles of modeling human behavior
Principles of modelling human behaviour as follows-
A. Behaviour is a product of immediate environment- human behaviour is a product of immediate environment and it is reflecting reaction of various individuals based upon the immediate environment like when there would be presence of a camera, people would be behaving more consciously.
B. Behaviour is strengthened or weakened by the consequences- human behaviour will be dependent upon the consequences and it is always strengthen and weakened by the various consequences as consequences will make the behaviour stronger because human will be believing that doing something will be yield him better results
C. Behaviour will be better reacting to positive consequences rather than negative consequences- human behaviour will be highly reactive to the positive consequences and they will be trying to repeat this behaviour if they are getting positive consequences.
D.whether the behaviour is reinforced or punished can only be known by the future consequences-when there would be consequences of certain behaviour then those behaviour would rather be reinforced or completely abandoned.
humans will be generally trying to reinforce the decisions which will be helping them and they will be trying to abandon the decision or trying to discipline themselves in abandonment of the decision which are hurting them so they will always be trying to analyse with decision is helping them and they need to improve upon that decision and they will also be looking for abandonment of certain decisions so his overall behaviour will be impacted.
Behaviourial modelling of human behaviour is dependent upon the behaviour of human under various different circumstances and it will be reflecting that humans are always affected by the presence of external as well as internal process in decision-making so there will always be a nature of decision-making process that will be affecting the behaviour of the human and they will be addressed by various kinds of field study as well as experimental test and they will be trying to implement best possible course of action which are to be taken by human in order to help him so that he can continuously improve upon his behaviour and he can help himself under various situations by undertaking these behaviours .
The four types of modelling of human behaviour is reflective behaviour of human under various situations and they will be trying to read the behaviour of human through these four analysis methods which are trying to reflect upon continuous understanding by the human in order to effect himself through his behaviour analysis by implementing that behaviour is a product of the immediate environment and they are needed to be reinforced or abandoned in order to help themselves make better decisions so that they can involve themselves with better decision making and improve the behaviour of themselves as well as their surrounding so that will be implicated in their decision making process and natural behaviour and performance.