Risky Decisions Essay

Have you ever been faced with a decision that you knew what you should have done but chose differently? At one point in a person’s life, everyone experiences making a risky decision, and depending on the decision it may play out in favor of what that person was hoping for, other times not. The studied performed is called Risky Decisions and it takes into account the idea of a framing effect where an outcome of a decision can almost be predicted based off of the wording (Kahneman and Tversky, 1982). The point of this experiment is to discover if people take risks that involve any type of gain if loss is a possibility opposed to the idea of risk aversion when there are only gains. “Risky” has different definitions depending on the person that is asked and how the context is framed, but it all breaks down to the expected utility theory based off of the idea that if a person has relevant information they will make a decision based off of the maximum expected utility (Goldstein 2011). Utility normally refers to monetary value, but other factors such as emotions, stress, and even video games can lead to an individual making risky decisions to experience a better payoff in the end because people feel the need to justify their decisions to others.

Emotions play a role in everyday life in all things big or small, but particularly in making decisions. When an individual is deciding on what to do, they take into account what their expected emotions would be, but the determining factor is the immediate emotions they feel while making the decision. With expected emotions, an individual will think about how happy or upset they may feel for instance if they win a monetary cash prize, or gamble too much and walk away with nothing. Often ...

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...occurs in everyday life for everyone. Making decisions is a constant process the human brain makes many times a day, for instance whether to go to the gym or eat McDonalds, go to the bar over studying for a test, or betting “all-in” at a poker tournament with no cards that are able to be played. All of those examples are risky depending on the type of person making those decisions. No one person is the same as the next, so risky decisions are subjective, although there are just some decisions that can be life changing like where to go to college, who to marry, and to have children or not. Also, the context in which the situation is framed plays a huge role on how a person decides what to do. Many influences such as emotions, stress, video games, or even other people’s decisions can ultimately determine the type of decision any individual may make, risky or not.