Substance of Emotion, Theories of Emotion, Types and Dimensions of Emotions, Emotional Styles; Fairness, Reciprocity and Trust; Conformity; Bayesian Decision Making, Heuristics and Cognitive Biases; Neuro Finance and Trader’s Brain.
The concept of emotion may seem simple, but scientists often have trouble agreeing on what it really means. Most scientists believe that emotions involve things other than just feelings
The way that someone experiences an emotion. A feeling is something that you experience internally, in your own mind, and that other people can understand based on your behavior. You can help other people understand how you feel using emotion terms, like “anger” or “sadness”—the subject of this study—or by using analogies, like “I feel the way a kid would feel if her dad took away her Halloween candy.”
They involve bodily reactions, like when your heart races because you feel excited. They also involve expressive movements, including facial expressions and sounds—for example, when you say “woah” because you are fascinated by something. And emotions involve behaviors, like yelling at someone when you are angry.
People use many different words to describe the emotions that they feel.
The patterns of emotion that we found corresponded to 25 different categories of emotion: admiration, adoration, appreciation of beauty, amusement, anger, anxiety, awe, awkwardness, boredom, calmness, confusion, craving, disgust, empathic pain, entrancement, excitement, fear, horror, interest, joy, nostalgia, relief, sadness, satisfaction, and surprise.
According to the Cannon-Bard theory of emotion, we feel emotions and experience physiological reactions such as sweating, trembling, and muscle tension simultaneously.
Another well-known physiological theory is the Cannon-Bard theory of emotion. Walter Cannon disagreed with the James-Lange theory of emotion on several different grounds. First, he suggested, people can experience physiological reactions linked to emotions without actually feeling those emotions. For example, your heart might race because you have been exercising, not because you are afraid.
Cannon also suggested that emotional responses occur much too quickly to be simply products of physical states. When you encounter a danger in the environment, you will often feel afraid before you start to experience the physical symptoms associated with fear, such as shaking hands, rapid breathing, and a racing heart.
Cannon and Bard’s theory suggests that the physical and psychological experience of emotion happens at the same time and that one does not cause the other.
The chapter consists of several aspects of behavioural finance and its foundations such as;
Overconfidence is the tendency for people to overestimate their knowledge, abilities, and the precision of their information, or to be overly sanguine (optimistic) of the future and their ability to control it. It is found that most people most of the time are overconfident is well documented by researchers in the psychology literature.
Overconfidence comes in different forms one of them is miscalibration, the tendency to believe that your knowledge is more precise (accuracy) than it really is.
Prospect theory assumes that losses and gains are valued differently, and thus individuals make decisions based on perceived gains instead of perceived losses. Also known as the "loss-aversion" theory, the general concept is that if two choices are put before an individual, both equal, with one presented in terms of potential gains and the other in terms of possible losses, the former option will be chosen.
Emotion is a complex, subjective experience accompanied by biological and behavioral changes. Emotion involves feeling, thinking, activation of the nervous system, physiological changes, and behavioral changes such as facial expressions.
There are many different types of emotions that have an influence on how we live and interact with others. At times, it may seem like we are ruled by these emotions. The choices we make, the actions we take, and the perceptions we have are all influenced by the emotions we are experiencing at any given moment.
The adaptive market hypothesis (AMH) is an alternative economic theory that combines principles of the well-known and often controversial efficient market hypothesis (EMH) with behavioral finance. It was introduced to the world in 2004 by Massachusetts Institute of Technology (MIT) professor Andrew Lo.
Character strengths and virtues are essential elements of Positive psychology. Seligman has given 6 virtues and 24 character strengths which are further explained in the presentation.
The chapter consists of several aspects of behavioural finance and its foundations such as;
Overconfidence is the tendency for people to overestimate their knowledge, abilities, and the precision of their information, or to be overly sanguine (optimistic) of the future and their ability to control it. It is found that most people most of the time are overconfident is well documented by researchers in the psychology literature.
Overconfidence comes in different forms one of them is miscalibration, the tendency to believe that your knowledge is more precise (accuracy) than it really is.
Prospect theory assumes that losses and gains are valued differently, and thus individuals make decisions based on perceived gains instead of perceived losses. Also known as the "loss-aversion" theory, the general concept is that if two choices are put before an individual, both equal, with one presented in terms of potential gains and the other in terms of possible losses, the former option will be chosen.
Emotion is a complex, subjective experience accompanied by biological and behavioral changes. Emotion involves feeling, thinking, activation of the nervous system, physiological changes, and behavioral changes such as facial expressions.
There are many different types of emotions that have an influence on how we live and interact with others. At times, it may seem like we are ruled by these emotions. The choices we make, the actions we take, and the perceptions we have are all influenced by the emotions we are experiencing at any given moment.
The adaptive market hypothesis (AMH) is an alternative economic theory that combines principles of the well-known and often controversial efficient market hypothesis (EMH) with behavioral finance. It was introduced to the world in 2004 by Massachusetts Institute of Technology (MIT) professor Andrew Lo.
Character strengths and virtues are essential elements of Positive psychology. Seligman has given 6 virtues and 24 character strengths which are further explained in the presentation.
A History of Personality Psychology (Part 1)MotiveMetrics
The history of personality psychology dates as far back as Ancient Greece. Indeed, philosophers since the 4th Century BCE have been trying to define exactly what it is that makes us us. Want to know more? Check out this blog post for a further explanation, http://hub.am/148ETuU.
Why we all need to practice emotional first aidTED Talks
We go to the doctor when we feel sick. So why don’t we see a health professional when we feel emotional pain: guilt, loss, loneliness? Guy Winch makes a compelling case to practice emotional hygiene — taking care of our emotions, our minds, with the same diligence we take care of our bodies.
Emotional intelligence and Better Decision MakingMick Lavin, MBA
Emotional Intelligence or the understanding of ones emotions is useful in all aspects of life and relationships. This presentation describes Emotional Intelligence as it relates to decision-making.
We will look at how Emotional Intelligence can help us make better decisions even under pressured circumstances.
How we feel in the moment will affect the decisions we make. If we are happy we may give concessions during negotiations, sadness may mean we lose interest and somehow sabotage negotiations; anger may lead to stubborn behaviour where we won’t concede ground. Fear may mean we put off decisions. Shock may make us stop taking risks, even measured risks.
How can we know and perhaps counteract these emotions when we make decisions?
By understanding a little more about Emotional Intelligence.
Indie studio Subliminal Gaming teamed up with WINGS Interactive, a company that invests in indie games that feature women and marginalized genders in key development positions, to release Button City to PS5, Xbox Series X|S, Nintendo Switch and Steam on August 10th, 2021.
According to dev duo Ryan and Shandiin Yazzie Woodward, their game Button City is all about a love of gaming and its communities.
Here's an inside look at the deck Subliminal used to initially shop Button City to partners in 2018, pre-production: this pitch was used to secure initial financing to build and launch the game.
Read more at bestpitchdeck.com/button-city-2018
A History Of Personality Psychology (Part 2)MotiveMetrics
In Part 1 of A History of Personality Psychology, we chronicled the development of the biological and theoretical basis for the existence of human personality. Shifting away from establishing the existence of personality, Part 2 of the history of personality psychology will be focused on the structure of personality.
►Read the blog post here: http://hub.am/15U3hFb
Coping strategies and emotional intelligence-Group 5.pptxAQSA SHAHID
Emotional intelligence (otherwise known as emotional quotient or EQ) is the ability to understand, use, and manage your own emotions in positive ways to relieve stress, communicate effectively, empathize with others, overcome challenges and defuse conflict.
The video for this presentation is available on our Youtube channel:
https://youtube.com/allceuseducation A continuing education course for this presentation can be found at https://www.allceus.com/member/cart/index/index?c=
Today's webinar is the first of three to help you help your clients (and staff) deal with stress and lead happier lives.
Introduction to foreign Exchange Management
Hand written notes ( B.com sem 6th )
Foreign Exchange features
And its theories
balance of payments
Types of risk
Futures and types of orders
Foreign Exchange rate systems
Your Life Satisfaction Score (beta) is an indicator of how you thrive in your life: it reflects how well you shape your lifestyle, habits and behaviors to maximize your overall life satisfaction along the five following dimensions:
►1. Health & fitness, reflecting your physical well-being and healthy habits;
►2. Positive emotions & gratitude, indicating how well you embrace positive emotions;
►3. Skills & expertise, measuring the ability to grow your expertise and achieve something unique;
►4. Social skills & discovery, assessing the strength of your network and your inclination to discover the world;
►5. Leadership & meaning, gauging your compassion, generosity and how much 'you are living the life of your dream'.
Visit www.Authentic-Happiness.com to check your Life Satisfaction score. Free, no registration required.
A History of Personality Psychology (Part 1)MotiveMetrics
The history of personality psychology dates as far back as Ancient Greece. Indeed, philosophers since the 4th Century BCE have been trying to define exactly what it is that makes us us. Want to know more? Check out this blog post for a further explanation, http://hub.am/148ETuU.
Why we all need to practice emotional first aidTED Talks
We go to the doctor when we feel sick. So why don’t we see a health professional when we feel emotional pain: guilt, loss, loneliness? Guy Winch makes a compelling case to practice emotional hygiene — taking care of our emotions, our minds, with the same diligence we take care of our bodies.
Emotional intelligence and Better Decision MakingMick Lavin, MBA
Emotional Intelligence or the understanding of ones emotions is useful in all aspects of life and relationships. This presentation describes Emotional Intelligence as it relates to decision-making.
We will look at how Emotional Intelligence can help us make better decisions even under pressured circumstances.
How we feel in the moment will affect the decisions we make. If we are happy we may give concessions during negotiations, sadness may mean we lose interest and somehow sabotage negotiations; anger may lead to stubborn behaviour where we won’t concede ground. Fear may mean we put off decisions. Shock may make us stop taking risks, even measured risks.
How can we know and perhaps counteract these emotions when we make decisions?
By understanding a little more about Emotional Intelligence.
Indie studio Subliminal Gaming teamed up with WINGS Interactive, a company that invests in indie games that feature women and marginalized genders in key development positions, to release Button City to PS5, Xbox Series X|S, Nintendo Switch and Steam on August 10th, 2021.
According to dev duo Ryan and Shandiin Yazzie Woodward, their game Button City is all about a love of gaming and its communities.
Here's an inside look at the deck Subliminal used to initially shop Button City to partners in 2018, pre-production: this pitch was used to secure initial financing to build and launch the game.
Read more at bestpitchdeck.com/button-city-2018
A History Of Personality Psychology (Part 2)MotiveMetrics
In Part 1 of A History of Personality Psychology, we chronicled the development of the biological and theoretical basis for the existence of human personality. Shifting away from establishing the existence of personality, Part 2 of the history of personality psychology will be focused on the structure of personality.
►Read the blog post here: http://hub.am/15U3hFb
Coping strategies and emotional intelligence-Group 5.pptxAQSA SHAHID
Emotional intelligence (otherwise known as emotional quotient or EQ) is the ability to understand, use, and manage your own emotions in positive ways to relieve stress, communicate effectively, empathize with others, overcome challenges and defuse conflict.
The video for this presentation is available on our Youtube channel:
https://youtube.com/allceuseducation A continuing education course for this presentation can be found at https://www.allceus.com/member/cart/index/index?c=
Today's webinar is the first of three to help you help your clients (and staff) deal with stress and lead happier lives.
Introduction to foreign Exchange Management
Hand written notes ( B.com sem 6th )
Foreign Exchange features
And its theories
balance of payments
Types of risk
Futures and types of orders
Foreign Exchange rate systems
Your Life Satisfaction Score (beta) is an indicator of how you thrive in your life: it reflects how well you shape your lifestyle, habits and behaviors to maximize your overall life satisfaction along the five following dimensions:
►1. Health & fitness, reflecting your physical well-being and healthy habits;
►2. Positive emotions & gratitude, indicating how well you embrace positive emotions;
►3. Skills & expertise, measuring the ability to grow your expertise and achieve something unique;
►4. Social skills & discovery, assessing the strength of your network and your inclination to discover the world;
►5. Leadership & meaning, gauging your compassion, generosity and how much 'you are living the life of your dream'.
Visit www.Authentic-Happiness.com to check your Life Satisfaction score. Free, no registration required.
” Emotions are complex psychological states involving three distinct components: a subjective experience, a physiological response, and a behavioral or expressive response”
"Discovering Psychology," by Don Hockenbury and Sandra E. Hockenbury
In 1972, psychologist Paul Ekman suggested that there are six basic emotions that are universal throughout human cultures: fear, disgust, anger, surprise, joy, and sadness.
In the 1980s, Robert Plutchik introduced another emotion classification system known as the wheel of emotions. This model demonstrated how different emotions can be combined or mixed together, much like the way an artist mixes primary colors to create other colors.
Plutchik proposed eight primary emotional dimensions: joy vs. sadness, anger vs. fear, trust vs. disgust, and surprise vs. anticipation.
These emotions can then be combined to create others, such as happiness + anticipation = excitement.
In 1999, Ekman expanded his list to include a number of other basic emotions, including embarrassment, excitement, contempt, shame, pride, satisfaction, and amusement
We all have good and bad thoughts from time to time and situation to situation. We are bombarded daily with spiraling thoughts(both negative and positive) creating all-consuming feel , making us difficult to manage with associated suffering. Good thoughts are like our Mob Signal (Positive thought) amidst noise(negative thought) in the atmosphere. Negative thoughts like noise outweigh positive thoughts. These thoughts often create unwanted confusion, trouble, stress and frustration in our mind as well as chaos in our physical world. Negative thoughts are also known as “distorted thinking”.
The study of the human being can be narrowed down into what is ref.docxchristalgrieg
The study of the human being can be narrowed down into what is referred to as psychology. The chapter presented various theories which touch directly on the human living. These theories have then been explained, and good examples of the same have been given.
Having read some blog postings, my friend at home became very stressed, and deviated from the normal manner in which he carried out some various tasks. He became withdrawn and over time, stopped being talkative. Depression began to creep in, and I could tell that he was going through some issues. Upon inquiring what the issues were, he told me that in most of the blog postings that he read, the main topic addressed was on how the female population preferred the quiet kinds of people to the more talkative kind and therefore, this friend of mine decided to be quiet.
However, having read the chapter, I understand that human beings are social beings and that everyone has a different level of sociality, which is guided by our emotions (Fredrickson, 2001). For this reason, I would use this concept to motivate this friend of mine to continue socializing like he was previously, with more insistence on his friends who like him for his ability to speak openly. In addition, I would motivate him to understand the difference between his emotions, arousal, and personality, as understood from the theories by individuals such as James-Lange, Cannon-Brad, Schachter-Singer and others. Understanding himself along these lines would enable him to better understand his personality, and in a manner that would ensure he does not go through such an episode again. From what I have learned from the chapter, people are different and understanding everyone as a unique person is the first step towards enjoying the kind of life that a person leads (Carducci, 2009).
In conclusion, the above is an outline of how I would motivate the person.
References
Carducci, B. J. (2009). The Psychology of Personality: Viewpoints, Research, and Applications. John Wiley & Sons.
· Instinct theory (now replaced by the evolutionary perspective) focuses on genetically predisposed behaviors.
· Drive-reduction theory focuses on how we respond to our inner pushes.
· Arousal theory focuses on finding the right level of stimulation.
· Abraham Maslow's hierarchy of needs focuses on the priority of some needs over others.
· How does social networking influence us?
1. As social creatures, we live for connection. Asked what he had learned from studying 238 Harvard University men from the 1930s to the end of their lives, researcher George Vaillant (2009) replied, "The only thing that really matters in life are your relationships to other people." A South African Zulu saying captures the idea: Umuntu ngumuntu ngabantu—"a person is a person through other persons."
· The Social Effects of Social Networking
By connecting like-minded people, the Internet serves as a social amplifier. It also functions as an online dating matchmaker. As electronic comm ...
The chapter consists of Tax Deducted at Source and Collection of Tax at source.
Tax Deducted at Source (TDS) is one of the ways to collect tax based on certain percentages on the amount payable by the receiver on goods/services. The collected tax is a revenue for the government.
Who is liable to deduct TDS under GST law?
A. A department or an establishment of the Central Government or State Government; or
B. Local authority; or
C. Governmental agencies; or
D. Such persons or category of persons as may be notified by the Government.
As per the latest Notification dated 13th September 2018, the following entities also need to deduct TDS-
An authority or a board or any other body which has been set up by Parliament or a State Legislature or by a government, with 51% equity ( control) owned by the government.
A society established by the Central or any State Government or a Local Authority and the society is registered under the Societies Registration Act, 1860.
Public sector undertakings.
What is TCS under GST
Tax Collected at Source (TCS) under GST means the tax collected by an e-commerce operator from the consideration received by it on behalf of the supplier of goods, or services who makes supplies through the operator’s online platform. TCS will be charged as a percentage on the net taxable supplies. The provision of TCS under GST is dealt under Section 52 of the CGST Act.
Who is liable to collect TCS under GST
Certain operators who own, operate and manage e-commerce platforms are liable to collect TCS. TCS applies only if the operators collect the consideration from the customers on behalf of vendors or suppliers. In other words, when the e-commerce operators pay the consideration collected to the vendors they have to deduct an amount as TCS and pay the net amount.
Here are few exceptions to the TCS provisions for the services provided by an e-commerce platform:
Hotel accommodation/clubs (unregistered suppliers)
Transportation of passengers – radio taxi, motor cab or motorcycle
Housekeeping services like plumbing, carpentry etc. (unregistered suppliers)
For example – M/s.XYZ stores (a proprietorship) is selling garments through Flipkart. Flipkart, being an e-commerce operator, before it makes the payment of consideration collected on behalf of XYZ, will be liable to deduct TCS.
What is the rate applicable under TCS
The dealers or traders supplying goods and/or services through e-commerce operators will receive payment after deduction of TCS @ 1%. The rate is notified by the CBIC in Notification no. 52/2018 under CGST Act and 02/2018 under IGST Act.
This means for an intra-state supply TCS at 1% will be collected, i.e 0.5 % under CGST and 0.5% under SGST. Similarly, for a transaction between the states, the TCS rate will be 1%, i.e under the IGST Act.
The chapter consists of Computation of Tax Liability and Payment of Tax; Interest on Delayed Payment of Tax; Refund of Tax; Tax Deduction at Source (TDS); Collection of Tax at Source (TCS); Computation of Interest on Delayed Payment of Tax. Composition scheme, eligible tax payers, turn over limit in case of composition scheme. Eligibility for composition scheme, person not eligible to opt composition scheme, conditions for availing composition scheme, advantages and disadvantages of composition scheme, computation of tax liability, Interest on delayed payment of tax,
Refund of Tax: Usually when the GST paid is more than the GST liability a situation of claiming GST refund arises. Under GST the process of claiming a refund is standardized to avoid confusion. The process is online and time limits have also been set for the same.
When can the refund be claimed?
There are many cases where refund can be claimed. Here are some of them – Excess payment of tax is made due to mistake or omission.
Dealer Exports (including deemed export) goods/services under claim of rebate or Refund
ITC accumulation due to output being tax exempt or nil-rated
Refund of tax paid on purchases made by Embassies or UN bodies
Tax Refund for International Tourists
Finalization of provisional assessment
How to calculate GST refund?
Let’s take a simple case of excess tax payment made. Mr. B’s GST liability for the month of September is Rs 50000. But due to mistake, Mr. B made a GST payment of Rs 5 lakh. Now Mr. B has made an excess GST payment of Rs 4.5 lakh which can be claimed as a refund by him. The time limit for claiming the refund is 2 years from the date of payment.
The chapter consists of basics of Goods and Service Tax, Tax Invoice; Credit and Debit Notes; E-Way Bill, Procedure for Generation of E-Way Bill; Accounts and Records; Electronic Cash Ledger, Manner of Utilization of Amount in Electronic Cash Ledger, Electronic Credit Ledger-Manner of Utilization of ITC, Electronic Liability Ledger-Order of Discharge of Tax and Other Dues.
An invoice is a commercial instrument issued by a supplier of goods/services to a recipient.
In GST, all invoices issued between the date of implementation of GST and the date of issuance of GST registration certificate will have to be reissued in the form of a revised invoice and have to be raised within a month of issuance of the registration certificate.
A supplementary tax invoice is an invoice that a taxable person issues if any deficiency is found in a tax invoice already issued by the said taxable person. A supplementary invoice is also known as a debit note.
The recipient who is registered under GST has to issue a payment voucher for the transactions(goods or services) on which reverse charge is applicable to the supplier. For example Ajay cashew house registered in Delhi had purchased cashew nuts from Vikram an agriculturist for Rs 100000 in Karnataka.
Rule 55 specifies the cases where at the time of removal of goods, goods may be removed on delivery challan and invoice may be issued after delivery. Issuance of Credit Note – Section 34(1)
Issuance of Debit Note – Section 34(3)
Details of Credit Note to be furnished in return – Section 34(2)
Details of Debit Note to be furnished in return – Section 34(4)
EWay Bill is an Electronic Way bill for movement of goods to be generated on the eWay Bill Portal. A GST registered person cannot transport goods in a vehicle whose value exceeds Rs. 50,000 (Single Invoice/bill/delivery challan) without an e-way bill that is generated on ewaybillgst.gov.in.
Registered Person – E-way bill must be generated when there is a movement of goods of more than Rs 50,000 in value to or from a registered person. A Registered person or the transporter may choose to generate and carry eway bill even if the value of goods is less than Rs 50,000.
e-Cash ledger indicates the amount that has been paid by the taxpayer to the government. The amount in this ledger can be used to make payment of tax, interest, liability, fees and so forth.
e-Credit ledger or electronic credit ledger is maintained in the form GST PMT-02 on the GST Portal.
This ledger helps in tracking all the Input Tax Credit (ITC) claims made by the taxpayer. However, it shall be noted that any remaining amount in the e-Credit ledger can be used in making the payment of output tax liability only. E-Liability Register will reflect the total tax liability of a taxpayer for a particular tax period.
Debit to Electronic Credit Ledger and Credit to Electronic Liability Register
Unit 5 CSM: Strategic Evaluation and ComtrolDayanand Huded
The chapter comprises of Overview of Strategic Evaluation; Strategic Control; Techniques of Strategic Evaluation and Control. Evaluation of Strategic Alternatives - Product Portfolio Models, BCG Matrix, GE Matrix, Gap Analysis; Strategic Control System.
Strategic evaluation and control is the final phase in the process of strategic management. Its basic purpose is to ensure that the strategy is achieving the goals and objectives set for the strategy. It compares performance with the desired results and provides the feedback necessary for management to take corrective action.
According to Fred R. David, strategy evaluation includes three basic activities
(1) examining the underlying bases of a firm’s strategy,
(2) comparing expected results with actual results, and
(3) taking corrective action to ensure that performance conforms to plans. Sometime, the best formulated strategies become obsolete (outdated) as a firm’s external and internal environments change.
Strategic control is a type of “steering control”. We have to track the strategy as it is being implemented, detect any problems or changes in the predictions made, and make necessary adjustments. This is especially important because the implementation process itself takes a long time before we can achieve the results.
Strategic control is like an alarm long before the calamity can happen.
Operational control is the process of ensuring that specific tasks are carried out effectively and efficiently. The operational control aims at evaluating the performance of the organization. Most of the control system in organization are operational in nature. Some examples of operational control are : Budgetary control, Quality control, Inventory control, Production Control, Cost control etc.
Portfolio Model is a technique used to analyse organisations in relation to their environments
Portfolio (set, collection, assortment, range, group)
A business Portfolio may be any collection of brands/products, markets, branches /divisions, income generating assets, etc.
PA is usually applied to firms with multiple SBUs (more than one product/services, customer categories, markets , divisions)
Helps managers in taking decisions regarding which SBUs to allocate more or less resources to at a given strategic point in time
After portfolio analysis firm makes an informed strategic choice e.g.
To have a balanced portfolio (minimize risk and maximize return) of all portfolios
To actively deploy a retrenchment strategy
Unit V AMM Green Marketing, CRM & Rural MarketingDayanand Huded
The Presentation comprises of Green marketing, Customer relationship management and rural marketing.
Green marketing is the marketing of products that are presumed to be environmentally safe. It incorporates a broad range of activities, including product modification, changes to the production process, sustainable packaging, as well as modifying advertising.
The term ‘green’ is indicative of purity. Green means pure in quality and fair or just in dealing. For example, green advertising means advertising without adverse impact on society. Green message means matured and neutral facts, free from exaggeration or ambiguity.
CRM: Customer Relationship Management is a comprehensive approach for creating, maintaining and expanding customer relationships.
CRM “is a business strategy that aims to understand, anticipate and manage the needs of an organisation’s current and potential customers”
It is a “comprehensive approach which provides seamless integration of every area of business that touches the customer- namely marketing, sales, customer services and field support through the integration of people, process and technology”
CRM is a shift from traditional marketing as it focuses on the retention of customers in addition to the acquisition of new customers
“The expression Customer Relationship Management (CRM) is becoming standard terminology, replacing what is widely perceived to be a misleadingly narrow term, relationship marketing (RM)”
CRM (Customer Relationship Management) is a comprehensive strategy and process of acquiring, retaining and partnering with selective customers to create superior value for the company and the customer.
The basic objective of CRM is to increase marketing efficiency and effectiveness.
Rural Marketing:
Rural marketing is a practise of assessing, persuading and converting the needs, wants, purchasing power of the customers into effective demand for products and service out for sale which would help in sufficing the requirements of people in the rural areas and thus increase the satisfaction levels as well as standard of living.
There are 600,000 villages in India. 25% of all villages account for 65% of the total rural population. So we can contact 65% of 680 million or 700 million population by simply contacting 150000 villages – which shows the huge potential of this market.
Rural marketing involves the process of developing, pricing, promoting, distributing rural specific product and a service leading to exchange between rural and urban market which satisfies consumer demand and also achieves organizational objectives.
The chapter comprises of Service Marketing, E-Marketing, Green Marketing, Customer Relationship Management, Rural Marketing; Other Emerging Trends- Ethical Issues in Marketing.
Service is an act or performance that one party can offer to another that is essentially intangible and does not result in any ownership of anything. Its production may or may not be tied to physical products.(Philip Kotler)
It is based on relationship and value.
It may be used to market a service or product.
What is Service Marketing?
The American Marketing Association defines services marketing as “an organizational function and a set of processes for identifying or creating, communicating, and delivering value to customers and for managing customer relationship in a way that benefit the organization and stake-holders”.
Service marketing is involved in designing, delivering, and doing post-delivery analysis of services for optimizing reach, measuring customer satisfaction, and standing-out from identical services offered by other market players.
Intangibility: A service is not a physical product that you can touch or see. A service can be experienced by the buyer or the receiver. Also, you can not judge the quality of the service before consumption.
Heterogeneous: There can be no perfect standardization of services. Even if the service provider remains the same, the quality of the service may differ from time to time.
Inseparability: One unique characteristic of services is that the service and the service provider cannot be separated. Unlike with goods/products the manufacturing and the consumption of services cannot be separated by storage.
No Stock Maintenance: The production and consumption of services are not inseparable because storage of services is not possible. Being an intangible transaction there can never be an inventory of services.
The potential customers form an impression about the service on the basis of service environment. The service environment represents the physical back drop that surrounds the service.
For example, providing hygienic food is the core service in a hotel or restaurant. Customers expect the restaurants to be maintained clean, offer flexible dining hours prompt service, soft music, décor, exotic menu etc.
Advantages of Service Marketing: 1, Repeat business
When you build a plan of service to reach your customers, you can expect a reward of repeat business from them. The goal of effectively marketing your brand is to capture the attention of your target market.
2. referrals
The next best thing to having your clients come back is to have them tell others about their experience and recommend your products or services to them. You must consider that if your customers have a bad experience, it is likely they will tell 10 people about that negative experiences also.
3. publicity
Other benefits from your good service are through publicity. As the buzz flows about your outstanding service, from following through on what you’ve promised.
The chapter comprises of Meaning and Characteristics, Importance, Factors Influencing Consumer Behaviour, Consumer Purchase Decision Process, Buying Roles, Buying Motives, Buyer Behaviour Models.
Consumer behaviour is the study of how individual customers, groups or organizations select, buy, use, and dispose ideas, goods, and services to satisfy their needs and wants.
It refers to the. actions of the consumers in the marketplace and the underlying motives for those actions.
Consumer behaviour is the study of how people make decisions about what they buy, want, need, or act in regards to a product, service or company.
It is a study of the actions of the consumers that drive them to buy and use certain products. Understanding consumer buying behavior is most important for marketers as it helps them to relate better to the expectation of the consumers.
a) Consumer behavior is the part of human behavior: This cannot be separated. Human behavior decides what to buy, when to buy etc. This is unpredictable in nature. Based on the past behavioral pattern one can at least estimate like the past he might behave.
b) Learning the consumer is difficult and complex as it involves the study of hum beings: Each Individual behaves differently when he is placed at different situations. Every day is a lesson from each and every individual while we learn the consumer behavior. Today one may purchase a product because of its smell, tomorrow it may vary and he will purchase another due to some another reason.
c) Consumer behavior is dynamic: A consumer's behavior is always changing in nature: The taste and preference of the people vary. According to that consumers behave differently. As the modern world changes the consumer's behaving pattern also changes.
d) Consumer behavior is influenced by psychological, social and physical factors: A consumer may be loyal with a product due to its status values. Another may stick with a product due to its economy in price. Understanding these factors by a marketer is crucial before placing the product to the consumers.
1. To design production policies: This is the first importance of consumer behaviour and it means that all the production policies have designed taking into consideration the consumer preference so that product can be successful in the market.
2. Know the effect of price on buying: This is the second consumer behaviour importance and it means that consumer behavior can help in understanding the effect of price on buying. Whenever the price is moderate on cheap more and more customer will buy the product.
After the time of production, there comes a time in which the company has to decide what the price of our product will be because it helps to divide the categories of the customer and also helps to attain more sales.
3. Exploit the market opportunities: This is the third importance or significance of consumer behaviour and it means that the change in consumer preference can be a good opportunity for the marketing
The chapter comprises of Meaning, Environment, Raising of Finance in International Markets, Euro Issues, GDRs and ADRs Guidelines for Raising Funds in International Markets through various Instruments; Working of International Stock Exchanges with respect to their Size - Listing Requirements, Membership, Clearing and Settlement of New York Stock Exchange, NASDAQ, London Stock Exchange, Tokyo Stock Exchange, Luxembourg Stock Exchange, German and France Stock Exchanges.
The international stock market refers to all the international markets that negotiate stocks from their domestic companies. For example, you can buy stocks from Apple at the local American market, but to get stocks from the Japanese Sapporo, you need to go the international (Japanese) market. Most countries have their own stock exchange.
Part of the financial system concerned with raising long-term capital through shares, bonds, and other long-term investments.
EURO ISSUE:
The term `euro' denotes that the issue is listed on a European Stock Exchange.
A euro issue is a issue where the securities are issued in a currency different from the currency of the country of issue and the securities are sold in international market to individual and institutional investors.
Euro securities are negotiable and transferable securities distributed by a syndicate of market intermediaries and underwriters, By an euro issue, a company is able to raise funds at a cheaper rate, Euro bond is an international bond issued to investors from throughout the world.
A global depositary receipt (GDR) is a certificate issued by a bank that represents shares in a foreign stock on two or more global markets. GDRs typically trade on American stock exchanges as well as Eurozone or Asian exchanges.
GDRs represent ownership of an underlying number of shares of a foreign company and are commonly used to invest in companies from developing or emerging markets by investors in developed markets.
Prices of global depositary receipt are based on the values of related shares, but they are traded and settled independently of the underlying share.
ADR's are depository receipts issued in United States of America (USA) in accordance with the provisions of Securities and Exchange Commission.
American Depository Receipts (ADRs) offer US investors a means to gain investment exposure to non-US stocks without the complexities of dealing in foreign stock markets.
It refers to a negotiable certificate issued by a U.S. depositary bank representing a specified number of shares usually one share of a foreign company's stock.
The ADR trades on U.S. stock markets as any domestic shares would. ADRs offer U.S. investors a way to purchase stock in overseas companies that would not otherwise be available.
It is denominated in US $
INFOSYS Technologies was the First Indian Company to issue ADR.
The chapter comprises of The Depositories Act, 1996; SEBI Depositories and Participants Regulations 1996 and 2012; Types of Depositories - NSDL, CDSL and Depository Participant; Dematerialization - International Securities Identification Number (ISIN) - Procedure for Dematerialization and Rematerialization; Settlement of Off- Market Transactions: Insider Trading - Legal Framework for Investor Protection in India; Internet Initiatives at Depository services; Credit Rating- Meaning and Necessity, Methodology of Credit Rating, Credit Rating Agencies in India.
What is Depository?
An organization where the securities of an investor are held in electronic form at the request of the investor and which carries out the securities transactions by book entry through the medium of a depository participant.
What is a Depository System?
A system whereby transfer of securities takes place by means of book entry on the ledgers of the Depository without physical movement of scripts.
Problems Resulted in Formation of Depository
Before introduction of Depository system, the problems faced by investors and corporates in handling large volume of paper were as follows:
1)Bad deliveries, 2) Fake certificates, 3) Loss of certificates in transit
4) Mutilation of certificates, 5) Delays in transfer Long settlement cycles, 6), Mismatch of signatures, 7) Delay in refund and remission of dividend etc.
Code of Conduct for Participants
1. A participant shall make all efforts to protect the interests of investors.
2. A participant shall always endeavour to—
(a) render the best possible advice to the clients having regard to the clients needs and the environments and his own professional skills;
grievances of investors are redressed without any delay
3. A participant shall maintain high standards of integrity in all its dealings with its clients and other intermediaries, in the conduct of its business.
4. A participant shall be prompt and diligent in opening of a beneficial owner account, dispatch of the dematerialisation request form, rematerialisation request form and execution of debit instruction slip and in all the other activities undertaken by him on behalf of the beneficial owners.
5. A participant shall endeavour to resolve all the complaints against it or in respect of the activities carried out by it as quickly as possible, and not later than one month of receipt.
6. A participant shall not increase charges/fees for the services rendered without proper advance notice to the beneficial owners.
7. A participant shall not indulge in any unfair competition, which is likely to harm the interests of other participants or investors or is likely to place such other participants in a disadvantageous position while competing for or executing any assignment.
8. A participant shall not make any exaggerated statement whether oral or written to the clients either about its qualifications or capability to render certain services or about its achievements in regard to SE.
The chapter comprises of Importance and Functions, Listing of Securities in Stock Exchanges; Players in Stock Exchange - Investors, Speculators, Market Makers, Stock Brokers; Eligibility Criteria; Trading in Stock Exchange, Stock Exchanges - Bombay Stock Exchange, National Stock Exchange, Over-the-Counter Exchange of India; The SEBI Trading Mechanism - BOLT, NEAT System and Screen Based System.
Listing refers to the admission of the securities of a company on a recognised stock exchange for trading. Listing of securities is undertaken with the primary objective of providing marketability, liquidity and transferability of shares.
To be submitted along with the application for listing:-
1. Memorandum of Associations, Articles of Association, Prospectus, Directors’ report, Annual Accounts, Agreement with Underwriters, etc.
2. Company’s activities, capital structure, distribution of shares, dividends and bonus shares issued, etc.
Listing Requirements:
For this purpose companies have been classified into 2 groups:-
1. Large Cap Companies (minimum issue size of Rs.10 crores and market capitalization of not less than Rs.25 crores)
2. Small Cap Companies (minimum issue size of Rs.3 crores and market capitalization of not less than Rs.5 crores)
Trading in Stock Exchange
The system of trading in stock exchanges for many years was known as floor trading.
In the new electronic stock exchanges which have fully automated computerized mode of trading, floor trading is replaced with a new system of trading known as screen-based trading.
Screen-based trading are two types
1. Quote driven system 2. Order driven system
Under the quote driven system the market- maker, who is a dealer in particular security, input two way quotes into the system that is bid price and offer price .
Under the order driven system clients place their buy and sell orders with the brokers.
Types of Orders
An investor may place two type of orders
1. Market order-In market order the broker is instructed by the investor to buy or sell a stated number of share immediately at the best price in the market.
2. Limit order- It is an order for the purchase or sale of securities at a fixed price specified by the client. “ buy at Rs. 50 or less” “ sell at Rs. 60 or more” No guarantee that limit order will be executed
National Stock Exchange
Established in 1992
Girish Chandra Chaturvedi, Chairperson
Ashishkumar Chauhan, MD and CEO
NSE is ranked 4th in the world in cash equities by number of trades as per the statistics maintained by the World Federation of Exchanges (WFE) for the calendar year 2021
First dematerialized electronic exchange in the country.
Number of Lists 2002 (As of October 2021)
The exchange was incorporated in 1992 as a tax-paying company and was recognized as a stock exchange in 1993 under the Securities Contracts (Regulation) Act, 1956, when P. V. Narasimha Rao was the Prime Minister of India and Manmohan Singh was the Finance Minister.
The chapter comprises of Primary Market - Its Role and Functions; Issue of Capital - Methods of Issuing Securities in Primary Market, Intermediaries in New Issue Market - Merchant Bankers, Underwriters, Brokers, Registrars and Managers Bankers; Pricing of Issue - Book Building, Green Shoe Option, Procedure for New Issues and SEBI Guidelines for Issue in Primary Market.
The primary market is where securities are created. It's in this market that firms sell (float) new stocks and bonds to the public for the first time. An initial public offering, or IPO, is an example of a primary market.
These trades provide an opportunity for investors to buy securities from the bank that did the initial underwriting for a particular stock.
An IPO occurs when a private company issues stock to the public for the first time.
Companies and government entities sell new issues of common and preferred stock, corporate bonds and government bonds, notes, and bills on the primary market to fund business improvements or expand operations. Although an investment bank may set the securities' initial price and receive a fee for facilitating sales, most of the funding goes to the issuer. Investors typically pay less for securities on the primary market than on the secondary market.
A rights offering (issue) permits companies to raise additional equity through the primary market after already having securities enter the secondary market. Current investors are offered prorated rights based on the shares they currently own, and others can invest anew in newly minted shares.
Companies can raise capital at relatively low cost, and the securities so issued in the primary market provide high liquidity as the same can be sold in the secondary market almost immediately.
The primary market is an important source for mobilisation of savings in an economy. Funds are mobilised from commoners for investing in other channels. It leads to monetary resources being put into investment options.
Chances of price manipulation in the primary market are considerably less when compared to the secondary market. Such manipulation usually occurs by deflating or inflating a security price, thereby deliberately interfering with fair and free operations of the market.
The primary market acts as a potential avenue for diversification to cut down on risk. It enables an investor to allocate his/her investment across different categories involving multiple financial instruments and industries.
It is not subject to any market fluctuations. The prices of stocks are determined before an initial public offering, and investors know the actual amount they will have to invest.
Unit II Tax Planning and Company PromotionDayanand Huded
The chapter comprises of Meaning of Tax Planning, Tax Avoidance, Tax Evasion and Tax Management; Features and Scope for Tax Planning; Business Location and Tax Planning; Nature of Business and Tax Planning: FTZ, Units in SEZ, 100% EOU and Infrastructure Development.
Tax planning is a focal part of financial planning. It ensures savings on taxes while simultaneously conforming to the legal obligations and requirements of the Income Tax Act, 1961. The primary concept of tax planning is to save money and mitigate one's tax burden.
Tax Planning is the arrangement of financial activities in such a way that maximum tax benefits are enjoyed by making use of all beneficial provisions in the tax laws. It entitles the assessee to avail certain exemptions, deductions, rebates and reliefs, so as to minimise its tax liability.
(i) Reduction of tax liability: One of the supreme objectives of tax planning is the reduction of the tax liability of the payer and the resultant saving of the earnings for a better enjoyment of the fruits of hard labour.
(ii) Minimization of litigation and the tax payer may be saved from the hardships and inconveniences caused by unnecessary litigations.
(iii) Productive investment: Tax planning is a measure of awareness of the taxpayer to the intricacies of the taxation laws and it is the economic consciousness of the income earner to find out the ways and means of productive investment of the earnings which would go a long way to minimize its tax burden.
(iv) Healthy growth of economy: The saving of earnings is the only basement upon which the economic structure of human life is founded.
(v) Economic stability: Productive investment increase contours of the national economy embracing in itself the economic prosperity of not only the tax payers but also of those who earn the income not chargeable to tax. The planning thus creates economic stability of the nation and its people by even distribution of economic resources.
(i) Residential status and citizenship of the assessee: We know that a non-resident in India is not liable to pay income-tax on incomes which accrue or arise and are also received outside India, whereas a resident in India is liable to pay income-tax on such incomes.
(ii) Heads of income/assets to be included in computing net wealth: Before the Tax-planner goes in for his task; he has to have a full picture of the sources of Income of the tax payer and the members of his family
This chapter consists of E-commerce Transaction and Liability in Special Cases; Tonnage Taxation, TDS; Advance Payment of Tax with reference to Corporate Assessee; TCS; Administrative Procedure; Assessment- Procedures and Types of Assessment; Return on Income; Statement of Financial Transaction (SFT). E-Filing: Appeal and Revision; Penalties.
Electronic contracts are governed by the basic principles elucidated in the Indian Contract Act, 1872, which mandates that a valid contract should have been entered with a free consent and for a lawful consideration between two adults.
Investments in the E-Commerce Space in India Foreign direct investment (“FDI”) in India is regulated under the Foreign Exchange Management Act 1999 (“FEMA”). The Department of Industrial Policy and Promotion (“DIPP”), Ministry of Commerce and Industry, Government of India makes policy pronouncements on FDI through Press Notes and Press Releases which are notified by the Reserve Bank of India (“RBI”) as amendments to Foreign Exchange Management Regulations, 2000
Tonnage Tax is a way for qualifying shipping companies to calculate their shipping related profits for Corporation Tax (CT) purposes. The shipping related profits are calculated based on the tonnage of the ships used in the company's shipping trade.
A tonnage tax is a taxation mechanism that can be applied to shipping companies instead of ordinary corporate taxation. The tax is determined by the net tonnage of the entire fleet of vessels under operation or use by a company. It is on the basis of this variable that taxation is applied.
Tonnage Tax is a way for qualifying shipping companies to calculate their shipping related profits for Corporation Tax (CT) purposes. The shipping related profits are calculated based on the tonnage of the ships used in the company’s shipping trade.
The concept of TDS was introduced with an aim to collect tax from the very source of income. As per this concept, a person (deductor) who is liable to make payment of specified nature to any other person (deductee) shall deduct tax at source and remit the same into the account of the Central Government. The deductee from whose income tax has been deducted at source would be entitled to get credit of the amount so deducted on the basis of Form 26AS or TDS certificate issued by the deductor.
Tax Planning with Reference to Managerial Decisions_NC.pdfDayanand Huded
This chapter comprises of Financial Decisions: Capital Structure Decisions; Dividend Policy; Bonus Shares and Capital Gains; Bond Washing Transactions; Own or Lease of an Asset, Installment or Hire Purchase, Make or Buy Decisions, Buying an Asset with Own Fund or Borrowed Fund and Repair, Replace, Renewal or Renovation; Shutdown or Continue: Tax Planning in respect of Amalgamation or De-Merger of Companies, Conversion of a Firm into a Company; Conversion of Sole Proprietorship into Company, Conversion of Company into Limited Liability Partnership.
Cost of Capital and also expenditure incurred in raising of such capital. Expectation of shareholders by way of dividend, growth etc. Expansion need of the business i.e. the rate by which profits of the business shall be again ploughed back in the business.
If the return on investment > rate of interest , maximum debt funds may be used, since is shall increase the rate of return on equity . However, cost of raising debt fund should be kept in mind.
if rate of return on investment < rate of interest, minimum debt funds should be used.
Where assessee enjoys tax holidays under various provisions of Income-Tax in such case minimum debt fund should be used, since the profit arising from business is fully exempt from tax which increase the rate of return of equity capital. But the borrowed funds reduces the profits ( profits less interest) before tax and to the extent exemption is reduce.
bond washing transaction can be defined as a transaction where some securities are sold sometime before the due date of Interest and reacquired after the due date is over. In order to discourage such transactions section 94 was introduced.
Where the owner of any securities (in this sub- section and in subsection (2) referred to as" the owner") sells or transfers those securities, and buys back or reacquires the securities, then, if the result of the transaction is that any interest becoming payable in respect of the securities is receivable otherwise.
Bond washing is the practice of selling a bond just before it pays a coupon payment and then buying it back once the coupon has been paid. Bond washing previously could result in apparently tax-free capital gains because after the coupon has been paid, the bond will often sell for less. However, the practice has been banned in most major jurisdictions.
The Chapter comprises of Carry Forward and Set Off of Losses in the case of Companies, Computation of Taxable Income of Companies; Computation of Corporate Tax Liability; Minimum Alternate Tax; and Tax on Distributed Profits of Domestic Companies. Surcharge, Minimum Alternate Tax, Problems on MAT.
The Finance Act, 2022 has inserted a new section 79A to the Income-tax Act to restrict set off of losses consequent to search, requisition and survey. It has been provided that in case the total income of any previous year of an assessee includes any undisclosed income detected as a result of:
(a) Search initiated under section 132; or
(b) A requisition made under section 132A; or
(c) A survey conducted under section 133A other than under section 133A(2A).
Then, no set-off of any loss, whether brought forward or otherwise, or unabsorbed depreciation, shall be allowed against such undisclosed income while computing the total income of the assessee for such previous year.
The total income of accompany is also computed in the manner in which income of any assessee is computed. A company is assessed in its own name; i.e. a company pays tax on its income as a distinct unit. A tax paid by a company is not deemed to have been paid on behalf of its shareholders. It is determined as follows:
1. First ascertain income under the different heads of income.
2. Income of other persons may be included in the income of the company under sections 60 and 61( para 206 and 207)
3. Current and brought forward losses should be adjusted according to the provisions of sections 70 to 80 (as per para 226 to 233).Para 335 of section 79 provides all the provisions regarding set off and carry forward of losses of closely held companies.
4. The total income so derived under computation of different heads of income is “Gross Total Income”.
5. Following deductions are allowed from the Gross total income so computed, under section 80C to 80 U
The chapter consists of organizational structure of financial system, Components of financial system, Functions of securities of market, securities market and economic growth, profile of Indian securities market, structure of stock exchange, OTCEI, SEBI Act-1992, Role of SEBI in capital market, powers and functions of SEBI, Securities contract regulation act 1956, Reforms to promote investor confidence, and Role of International Organisation of Securities COmmissions.
Study of how owners and managers of publicly-traded companies make decisions that affect the values of those companies.
Examines effects of manager’s and investor’s psychological biases on firms corporate finance decisions.
Main psychological traps met are: confirmation bias, hindsight bias, herding behavior conservatism, the role of affects, wishful thinking, opaque framing, representativeness bias and overconfidence.
“Real-world” view- Managers and investors may be irrational (Psychological Biases) (“homo sapiens” view).
Behavioural Corporate Finance: considers managerial irrationality/biases. Focus on corporate finance decisions (investment appraisal, capital structure/dividend policy.
How the personal traits of managers affect the decisions made in the firm, especially financial decisions. We will see that the psychological qualities of individuals holding management positions have a decisive effect on.
For instance, their financing and capital budgeting decisions or their dividend policy. It will also become clear that the psychological profile of each manager will provide an explanation for the financial decisions made beyond the scope of the company and its business sector.
Assumptions of Behavioural Corporate Finance
Assumes irrational entrepreneurs or managers
Postulates irrational investors and limited arbitrage.
The Rational Managers with Irrational Investors Approach
This approach assumes that securities market arbitrage is imperfect, and thus that prices can be too high or too low. Rational managers are assumed to perceive mispricings, and to make decisions that may encourage respond to mispricing.
Rational manager objectives in irrational market:
1. Fundamental value - Maximizing fundamental value has the usual ingredients.
2. Catering - Catering refers to decisions that aim at boosting stock price above the level of intrinsic value.
3. Market timing - Market timing relates to the decision that aims at exploiting temporary mispricing.
Two Key Building Blocks:
1. Limits on arbitrage - Irrational investors impact prices because arbitrage is limited.
2. Smart managers - Managers have the ability to detect when valuations are wrong and they act on mispricing.
The chapter consists of Expected Utility Theory [EUT] and Rational Thought: Decision Making under Risk and Uncertainty - Expected Utility as a basis for Decision-Making – Theories Based on Expected Utility Concept – Investor Rationality and Market Efficiency. Self Deception – Forms of Over Confidence, Causes of Over Confidence, and other Forms of Self-Deception. Prospect Theory, Difference between EUT and Prospect Theory; Agency Theory; SP/A Theory; Framing, Mental Accounting; Error in Bernoulli’s Theory.
Expected utility theory and its examples. Making decisions under certainty is easy. The cause and effect are known, and the risk involved is minimal. What’s tough is making decisions under risk and uncertainty. The outcome is unpredictable because you don’t have all the information about the alternatives. Before we learn deeper about decision-making under risk and uncertainty, let’s look at each of these situations such as certainty, risk and uncertainty. Despite all the data crunching and predictive technology, businesses these days have to deal with a lot of uncertainty and the ‘what if’ scenarios.
The recent pandemic outbreak has dramatically altered the business landscape globally. Today, decision-making has become more complicated due to the uncertainty all around us.
Quantitative management is not a modern business idea but a management theory that came into existence after World War II. Business owners initially used it in Japan to pick up the pieces of the devastation caused by the war and started taking baby steps toward reconstruction. It focuses on the following elements of business operations:
Customer satisfaction
Business value enhancement
Empowerment of employees
Creating synergy among teams
Creating quality products
Preventing defects
Being responsible for quality
Focusing on continuous improvement
Leveraging statistical measurement
Remaining focused on the processes
Commitment to refinement and learning
Quantitative techniques in management as a collection of mathematical and statistical tools. They’re known by different names, such as management science or operation research. In modern business methods, statistical techniques are also viewed as a part of quantitative management techniques.
When appropriately used, quantitative approaches to management can become a powerful means of analysis, leading to effective decision-making. These techniques help resolve complex business problems by leveraging systematic and scientific methods.
The Chapter consists of evolutionary aspects of behavioural finance. Discussed Hyperbolic discounting, familiarity bias, heuristics, self-deception, overconfidence, success equation, and EMH. Further, the chapter discussed the emotion and theories of emotions, dimensions of emotions, and social influence on investment and consumption. In psychology, a heuristic is an easy-to-compute procedure or "rule of thumb" that people use when forming beliefs, judgments or decisions. The familiarity heuristic was developed based on the discovery of the availability heuristic by psychologists Amos Tversky and Daniel Kahneman; it happens when the familiar is favored over novel places, people, or things.
The familiarity heuristic can be applied to various situations that individuals experience in day-to-day life. When these situations appear similar to previous situations, especially if the individuals are experiencing a high cognitive load, they may regress to the state of mind in which they have felt or behaved before. The familiarity heuristic stems from the availability heuristic, which was studied by Tversky and Kahneman. The availability heuristic suggests that the likelihood of events is estimated based on how many examples of such events come to mind. Thus the familiarity heuristic shows how "bias of availability is related to the ease of recall.
Individuals automatically assume that their previous behaviour will yield the same results when a similar situation arises. Emotion is a complex, subjective experience accompanied by biological and behavioral changes. Emotion involves feeling, thinking, activation of the nervous system, physiological changes, and behavioural changes such as facial expressions.
In psychology, emotion is often defined as a complex state of feeling that results in physical and psychological changes that influence thought and behavior. Emotionality is associated with a range of psychological phenomena, including temperament, personality, mood, and motivation.
According to author David G. Myers, human emotion involves “ physiological arousal, expressive behaviours, and conscious experience."
The Indian economy is classified into different sectors to simplify the analysis and understanding of economic activities. For Class 10, it's essential to grasp the sectors of the Indian economy, understand their characteristics, and recognize their importance. This guide will provide detailed notes on the Sectors of the Indian Economy Class 10, using specific long-tail keywords to enhance comprehension.
For more information, visit-www.vavaclasses.com
Palestine last event orientationfvgnh .pptxRaedMohamed3
An EFL lesson about the current events in Palestine. It is intended to be for intermediate students who wish to increase their listening skills through a short lesson in power point.
The Roman Empire A Historical Colossus.pdfkaushalkr1407
The Roman Empire, a vast and enduring power, stands as one of history's most remarkable civilizations, leaving an indelible imprint on the world. It emerged from the Roman Republic, transitioning into an imperial powerhouse under the leadership of Augustus Caesar in 27 BCE. This transformation marked the beginning of an era defined by unprecedented territorial expansion, architectural marvels, and profound cultural influence.
The empire's roots lie in the city of Rome, founded, according to legend, by Romulus in 753 BCE. Over centuries, Rome evolved from a small settlement to a formidable republic, characterized by a complex political system with elected officials and checks on power. However, internal strife, class conflicts, and military ambitions paved the way for the end of the Republic. Julius Caesar’s dictatorship and subsequent assassination in 44 BCE created a power vacuum, leading to a civil war. Octavian, later Augustus, emerged victorious, heralding the Roman Empire’s birth.
Under Augustus, the empire experienced the Pax Romana, a 200-year period of relative peace and stability. Augustus reformed the military, established efficient administrative systems, and initiated grand construction projects. The empire's borders expanded, encompassing territories from Britain to Egypt and from Spain to the Euphrates. Roman legions, renowned for their discipline and engineering prowess, secured and maintained these vast territories, building roads, fortifications, and cities that facilitated control and integration.
The Roman Empire’s society was hierarchical, with a rigid class system. At the top were the patricians, wealthy elites who held significant political power. Below them were the plebeians, free citizens with limited political influence, and the vast numbers of slaves who formed the backbone of the economy. The family unit was central, governed by the paterfamilias, the male head who held absolute authority.
Culturally, the Romans were eclectic, absorbing and adapting elements from the civilizations they encountered, particularly the Greeks. Roman art, literature, and philosophy reflected this synthesis, creating a rich cultural tapestry. Latin, the Roman language, became the lingua franca of the Western world, influencing numerous modern languages.
Roman architecture and engineering achievements were monumental. They perfected the arch, vault, and dome, constructing enduring structures like the Colosseum, Pantheon, and aqueducts. These engineering marvels not only showcased Roman ingenuity but also served practical purposes, from public entertainment to water supply.
Ethnobotany and Ethnopharmacology:
Ethnobotany in herbal drug evaluation,
Impact of Ethnobotany in traditional medicine,
New development in herbals,
Bio-prospecting tools for drug discovery,
Role of Ethnopharmacology in drug evaluation,
Reverse Pharmacology.
Students, digital devices and success - Andreas Schleicher - 27 May 2024..pptxEduSkills OECD
Andreas Schleicher presents at the OECD webinar ‘Digital devices in schools: detrimental distraction or secret to success?’ on 27 May 2024. The presentation was based on findings from PISA 2022 results and the webinar helped launch the PISA in Focus ‘Managing screen time: How to protect and equip students against distraction’ https://www.oecd-ilibrary.org/education/managing-screen-time_7c225af4-en and the OECD Education Policy Perspective ‘Students, digital devices and success’ can be found here - https://oe.cd/il/5yV
Students, digital devices and success - Andreas Schleicher - 27 May 2024..pptx
Emotions and Decision Making
1. Behavioural Finance
Unit - V
Emotions and Decision Making
Substance of Emotion, Theories of Emotion, Types and
Dimensions of Emotions, Emotional Styles; Fairness,
Reciprocity and Trust; Conformity; Bayesian Decision Making,
Heuristics and Cognitive Biases; Neuro Finance and Trader’s
Heuristics and Cognitive Biases; Neuro Finance and Trader’s
Brain.
Prepared by
Mr. Dayananda Huded M.Com NET, KSET
Department of Studies in Commerce
Rani Channamma University, PG Centre, Jamkhandi-01
E-mail: dayanandch65@gmail.com
1
Mr. Dayananda Huded
2. Substance of Emotion
• The concept of emotion may seem simple, but scientists often have trouble agreeing
on what it really means. Most scientists believe that emotions involve things other
than just feelings
• The way that someone experiences an emotion. A feeling is something that you
experience internally, in your own mind, and that other people can understand based
on your behavior. You can help other people understand how you feel using emotion
terms, like “anger” or “sadness”—the subject of this study—or by using analogies,
like “I feel the way a kid would feel if her dad took away her Halloween candy.”
• They involve bodily reactions, like when your heart races because you feel excited.
They also involve expressive movements, including facial expressions and sounds—
They also involve expressive movements, including facial expressions and sounds—
for example, when you say “woah” because you are fascinated by something. And
emotions involve behaviors, like yelling at someone when you are angry.
• People use many different words to describe the emotions that they feel.
• The patterns of emotion that we found corresponded to 25 different categories of
emotion: admiration, adoration, appreciation of beauty, amusement, anger, anxiety,
awe, awkwardness, boredom, calmness, confusion, craving, disgust, empathic pain,
entrancement, excitement, fear, horror, interest, joy, nostalgia, relief, sadness,
satisfaction, and surprise.
2
Mr. Dayananda Huded
4. Theories of Emotion
• 1. Evolutionary Theory
• According to the evolutionary theory of emotion, our emotions exist
because they serve an adaptive role. Emotions motivate people to respond
quickly to stimuli in the environment, which helps improve the chances of
success and survival.
• Naturalist Charles Darwin proposed that emotions evolved because they
were adaptive and allowed humans and animals to survive and reproduce.
Feelings of love and affection lead people to seek mates and reproduce.
Feelings of love and affection lead people to seek mates and reproduce.
Feelings of fear compel people to fight or flee the source of danger.
• Understanding the emotions of other people and animals also plays a
crucial role in safety and survival. If you encounter a hissing, spitting, and
clawing animal, chances are you will quickly realize that the animal is
frightened or defensive and leave it alone. Being able to interpret
correctly the emotional displays of other people and animals allows you
to respond correctly and avoid danger.
4
Mr. Dayananda Huded
5. 2. James Lange Theory
• The James-Lange theory is one of the best-known examples of a physiological
theory of emotion. Independently proposed by psychologist William James and
physiologist Carl Lange, the James-Lange theory of emotion suggests that
emotions occur as a result of physiological reactions to events.
• According to the James-Lange theory of emotion, an external stimulus leads to a
physiological reaction. Your emotional reaction depends upon how you interpret
those physical reactions.
• For example, suppose you are walking in the woods and see a grizzly bear. You
begin to tremble, and your heart begins to race. The James-Lange theory
begin to tremble, and your heart begins to race. The James-Lange theory
proposes that you will conclude that you are frightened ("I am trembling.
Therefore, I am afraid"). According to this theory of emotion, you are not
trembling because you are frightened. Instead, you feel frightened because you
are trembling.
5
Mr. Dayananda Huded
6. 3. Cannon Bard Theory
• According to the Cannon-Bard theory of emotion, we feel emotions and experience
physiological reactions such as sweating, trembling, and muscle tension
simultaneously.
• Another well-known physiological theory is the Cannon-Bard theory of emotion.
Walter Cannon disagreed with the James-Lange theory of emotion on several
different grounds. First, he suggested, people can experience physiological reactions
linked to emotions without actually feeling those emotions. For example, your heart
might race because you have been exercising, not because you are afraid.
• Cannon also suggested that emotional responses occur much too quickly to be simply
products of physical states. When you encounter a danger in the environment, you
products of physical states. When you encounter a danger in the environment, you
will often feel afraid before you start to experience the physical symptoms associated
with fear, such as shaking hands, rapid breathing, and a racing heart.
• Cannon and Bard’s theory suggests that the physical and psychological experience of
emotion happen at the same time and that one does not cause the other.
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7. 4. Schachter Singer Two Factor Theory
• Also known as the two-factor theory of emotion, the Schachter-Singer theory is an
example of a cognitive theory of emotion. This theory suggests that the physiological
arousal occurs first, and then the individual must identify the reason for this arousal to
experience and label it as an emotion. A stimulus leads to a physiological response that is
then cognitively interpreted and labeled, resulting in an emotion.
• Schachter and Singer’s theory draws on both the James-Lange theory and the Cannon-
Bard theory. Like the James-Lange theory, the Schachter-Singer theory proposes that
people infer emotions based on physiological responses. The critical factor is the situation
and the cognitive interpretation that people use to label that emotion.
• Like the Cannon-Bard theory, the Schachter-Singer theory also suggests that similar
• Like the Cannon-Bard theory, the Schachter-Singer theory also suggests that similar
physiological responses can produce varying emotions. For example, if you experience a
racing heart and sweating palms during an important exam, you will probably identify the
emotion as anxiety. If you experience the same physical responses on a date, you might
interpret those responses as love, affection, or arousal.
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8. 5. Cognitive Appraisal Theory
• According to appraisal theories of emotion, thinking must occur first
before experiencing emotion. Richard Lazarus was a pioneer in this area
of emotion, and this theory is often referred to as the Lazarus theory of
emotion.
• The cognitive appraisal theory asserts that your brain first appraises a
situation, and the resulting response is an emotion.
• According to this theory, the sequence of events first involves a stimulus,
followed by thought, which then leads to the simultaneous experience of a
followed by thought, which then leads to the simultaneous experience of a
physiological response and the emotion. For example, if you encounter a
bear in the woods, you might immediately begin to think that you are in
great danger. This then leads to the emotional experience of fear and the
physical reactions associated with the fight-or-flight response.
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9. 6. The Facial Feedback Theory
• The facial-feedback theory of emotions suggests that facial expressions are
connected to experiencing emotions. Charles Darwin and William James both
noted early on that, sometimes, physiological responses often have a direct
impact on emotion, rather than simply being a consequence of the emotion.
• The facial-feedback theory suggests that emotions are directly tied to changes in
facial muscles.
• For example, people who are forced to smile pleasantly at a social function will
have a better time at the event than they would if they had frowned or carried a
more neutral facial expression.
more neutral facial expression.
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11. 1. Happiness
• Of all the different types of emotions, happiness tends to be the one that
people strive for the most.
• Happiness is often defined as a “pleasant emotional state” that is
characterized by feelings of contentment, joy, gratification, satisfaction,
and well-being.
• Research on happiness has increased significantly since the 1960s within
a number of disciplines, including the branch of psychology known
as positive psychology. This type of emotion is sometimes expressed
as positive psychology. This type of emotion is sometimes expressed
through:
• Facial expressions: such as smiling
• Body language: such as a relaxed stance
• Tone of voice: an upbeat, pleasant way of speaking
• Happiness has been linked to a variety of outcomes including increased
longevity and increased marital satisfaction. Conversely, unhappiness has
been linked to a variety of poor health outcomes.
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12. 2. Sadness
• Sadness is another type of emotion often defined as a “transient
(impermanent) emotional state” characterized by feelings of
disappointment, grief (intense Sorrow), hopelessness, disinterest, and
dampened mood (make slightly wet).
• Like other emotions, sadness is something that all people experience from
time to time. In some cases, people can experience prolonged and severe
periods of sadness that can turn into depression.
• Sadness can be expressed in a number of ways including:
– Crying
– Crying
– Dampened mood
– Lethargy
– Quietness
– Withdrawal from others
• Sadness can often lead people to engage in coping mechanisms such as
avoiding other people, self-medicating, and ruminating (think deeply about
something) on negative thoughts.
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13. 3. Fear
• Fear is a powerful emotion that can also play an important role in
survival. When you face some sort of danger and experience fear,
you go through what is known as the fight or flight response.
• Your muscles become tense, your heart rate and respiration
increase, and your mind becomes more alert, priming your body to
either run from the danger or stand and fight.
• Expressions of this type of emotion can include:
– Facial expressions: such as widening the eyes and pulling back the chin
– Body language: attempts to hide or flea from the threat
– Physiological reactions: such as rapid breathing and heartbeat
• Of course, not everyone experiences fear in the same way. Some
people may be more sensitive to fear and certain situations or
objects may be more likely to trigger this emotion.
• Fear is the emotional response to an immediate threat.
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14. 4. Disgusting
• Disgust is another of the original six basic emotions described by Eckman.
• Disgust can be displayed in a number of ways including:
– Body language: turning away from the object of disgust
– Physical reactions: such as vomiting or retching
– Facial expressions:
• This sense of revulsion can originate from a number of things, including an unpleasant
taste, sight, or smell. Researchers believe that this emotion evolved as a reaction to foods
that might be harmful or fatal. When people smell or taste foods that have gone bad, for
example, disgust is a typical reaction.
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15. 5. Anger
• Anger can be a particularly powerful emotion characterized by feelings of hostility,
agitation, frustration, and antagonism towards others. Like fear, anger can play a part in
your body's fight or flight response.
• Anger is often displayed through:
• Facial expressions: such as frowning or glaring
• Body language: such as taking a strong stance or turning away
• Tone of voice: such as speaking gruffly or yelling
• Physiological responses: such as sweating or turning red
• Aggressive behaviors: such as hitting, kicking, or throwing objects
6. Surprise
• Surprise is usually quite brief and is characterized by a physiological startle response
following something unexpected.
• This type of emotion can be positive, negative, or neutral. An unpleasant surprise, for
example, might involve someone jumping out from behind a tree and scaring you as you
walk to your car at night.
• An example of a pleasant surprise would be arriving home to find that your closest friends
have gathered to celebrate your birthday.
• Surprise can have important effects on human behavior. For example, research has shown
that people tend to disproportionately notice surprising events.
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6. Surprise
16. Dimensions of Emotions
• 1. Pleasure (positive, negative)
• Emotions can be positive, pleasant and giving good feelings. Emotions
may also be negative, unpleasant and cause discomfort. Any emotion can
be placed on a scale between extreme pleasure and extreme discomfort,
with a zero point between where neither positive nor negative feelings are
experienced
• Positive Emotions: Happiness, Liking, respect, hope etc.
• Negative Emotions: Sadness, Anger, Fear, Shame and Disgust
• Negative Emotions: Sadness, Anger, Fear, Shame and Disgust
• 2. Focus (internal, external)
• Emotions may have a primary focus inside us or outside us, for example
being about ourselves or about the outer world. Sometimes these are very
much about one or the other and at other times they may be a bit of both.
A highly outward emotion is anger, as we project bad feelings toward
others. A highly inward one is contentment, for example in the way a
meditating person feels.
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17. • 3. Direction (attraction, repulsion): Emotions often have direction, bringing us
together with things or pushing us away from them. For example love is an attractive
emotion, while fear is repulsive. We can reduce distance by moving ourselves towards
object of interest or bringing it close. Likewise we can act on repulsion by pushing it
away or removing ourselves from its proximity.
• Direction is often about other people, such as when we like or dislike them. It can
also be about things and situations of danger or attraction. Greed, for example, may
pull us towards money, while fear may push us away from a dangerous place.
• 4. Intensity: Intensity is about how strongly we feel emotions. This is a uni-polar
dimension, as it can range from close to zero, for example when we feel flat or just a
bit irritated, to very intense, such as feelings of grief or extreme anger. Pleasure and
Locus are bi-polar scales as they have two poles with a 'zero' in between.
• 5. Arousal: Arousal is about activation, the energy and motivation that the emotions
give us towards taking action.
• Lower Arousal: Depression. High Arousal Emotion: Curiosity etc.
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18. Emotional Styles
• 1. Abandonment
• The ongoing fear that people will leave is at the root of this emotional style.
These people may fear that if they rock the boat in the smallest way, the ones
they love will leave. Or, they may adapt by running away from a relationship
before they can be hurt.
• 2. Entitlement
• People with this emotional style feel that rules don't apply to them. They may
have been spoiled as a child, or the love they received was based on a certain
quality — looks, academics, athletic skills. These people often exaggerate their
quality — looks, academics, athletic skills. These people often exaggerate their
prowess, usually to hide a feeling of inadequacy, or feel they are entitled to more
than their fair share of compensation. They also display a lack of self-discipline,
and the inability to delay gratification
• 3. Subjugation
• This emotional style revolves around the feeling that your own needs never take
priority in an intimate relationship. These people give in easily, but their hidden
resentment can smolder into anger and rage. Some will overreact at the least sign
of being controlled, while others are unable to make even a simple commitment.
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19. • 4. Exclusion
• Finding yourself on the outside of things often leads to this emotional
style. The perceived message is, "You're not like us." This feeling
typically causes a person to stay on the edge of the action, reinforcing the
feeling of exclusion. This may lead avoidance of groups in adulthood, or
conversely, cause someone to revel in their outcast role.
• 5. Mistrust
• Suspiciousness and a quick temper are typical of this emotional style.
Often the mistrust stems from having been physically, sexually, or
emotionally abused. People of this style tend to gravitate to relationships
emotionally abused. People of this style tend to gravitate to relationships
in which their worst fears are confirmed, getting involved with people
who treat them badly.
• 6. Failure
• A typical feeling in this emotional style is being deficient despite one's
accomplishments. This can lead people to push themselves extremely
hard, despite the constant fear of failure. Some fall prey to the imposter
phenomenon — you succeed, but secretly feel you're a fraud and will be
found out. Others discover that believing they will fail becomes a self-
fulfilling prophecy.
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20. • 7. Unlovability
• The automatic assumption that "I'm not lovable" typifies this emotional
style. Shame and humiliation, along with a feeling of being flawed, are
this style's prominent emotions. Two patterns are seen in people who feel
unlovable. Some give in to their deep feeling of unworthiness, while
others hide behind arrogance, seeking public recognition and adulation.
• 8. Perfectionism
• People with this emotional style unrelentingly hold themselves to the
highest standards. No matter how well they do, it's never good enough, so
highest standards. No matter how well they do, it's never good enough, so
they drive themselves until the rest of their life suffers. This emotional
style drives people to push themselves in sports, at school, in physical
appearance, or for social status.
• 9. Deprivation
• At the heart of this emotional style is the belief, "My needs won't be met."
No matter how much is given to people of this style, it never feels like
enough. Some people overindulge in an attempt to nurture themselves,
while others become the caretaker they never had, and may gravitate to
careers in which they help others, like social work or nursing.
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21. Fairness, Reciprocity and Trust
• Rabin's model of ‘fairness’ is widely interpreted as encapsulating
reciprocity.
• Reciprocity is modelled as being kind to the kind and unkind to the
unkind.
• Paradoxically, this ‘reciprocal kindness’ cannot explain trust and
trustworthiness.
• We argue trust and trustworthiness should be understood as
• We argue trust and trustworthiness should be understood as
‘reciprocal cooperation’.
• Trust and trustworthiness are cooperative moves in the creation of
mutual benefit.
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22. Heuristics and Cognitive Biases
• 1. Confirmation Bias: Confirmation bias refers to the tendency to search for,
interpret, and remember information that confirms our beliefs. In short, we prefer
information that tells us we’re right…and we’re more likely to remember the hits and
forget the misses.
• A prime example of confirmation bias plays out in our modern media environment,
where we’re able to select news organizations and even the types of stories that
validate our worldview. With the help of algorithms that learn our preferences, we can
get trapped in filter bubbles, or personal information ecosystems, where we’re served
more and more content that reaffirms our existing beliefs and protected from evidence
that we’re wrong.
that we’re wrong.
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23. • 2. Availability Heuristics: The availability heuristic is a mental short-cut in
which we estimate how likely or important something is based on how easily
we can think of examples. However, because we are more likely to remember
events that are recent, vivid, or emotional, we overestimate the likelihood of
certain events and may make poor decisions.
• Consider the following examples:
• You’re at the beach, thinking about going into the water, and images of shark
attacks pop into your head. You sit and read a book instead.
• You recently saw a plane crash on the news, and you were already scared of
• You recently saw a plane crash on the news, and you were already scared of
flying, so you decide to drive on your next trip.
• You just watched a documentary about someone who won big on the slot
machines, so you plan a trip to the casino. Someone has to win…it might as
well be you!
• You’re worried about someone kidnapping your child because you saw news
coverage of an attempted abduction. Thankfully, the child wasn’t harmed, but
you don’t want to risk it. Today’s world is so much more dangerous than it
was when you were young.
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25. • 3. Anchoring Effect or Anchoring Heuristic: The anchoring effect
refers to our tendency to “anchor” to the first piece of information we
learn about something, and form our beliefs about that thing based on
the anchor. Newer information isn’t evaluated objectively, but, rather,
through the lens of the anchor. The anchoring effect is an extremely
common cognitive bias, and one that can interfere with our abilities to
make good decisions and objectively understand reality. Therefore,
understanding the anchoring effect can save us time, money, and
understanding the anchoring effect can save us time, money, and
improve the quality of our thinking.
• The anchoring effect occurs when we unwittingly cling to the first bit
of information we get about something. However, if we’re not careful,
anchoring can result in poor decisions that we may regret.
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27. • 4. Representativeness Heuristics: The representativeness
heuristic doesn’t exactly flow easily off the tongue. Nonetheless, this
heuristic is well worth our attention. Like all heuristics, the
representativeness heuristic is a mental shortcut our brains take to
preserve its limited resources, in this case to make quick judgments about
the likelihood of something based on how similar it is to existing mental
categories.
• The representativeness heuristic is an error of reasoning that occurs when
we make generalizations based on our mental models of reality.
we make generalizations based on our mental models of reality.
• To use a classic example, let’s say I told you that Mary is a quiet, shy
introvert who’s not very interested in getting to know people and is also
very detail oriented. Based on this description, is it more likely that Mary
is a librarian or a mechanic? Our gut tells us that Mary is much more
likely to be a librarian because her characteristics sound
more representative of our mental models of librarians.
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29. Bayesian Decision Making
• How can we use (probability) to make decisions?
• Examples of decision problems
– How to control a self driving vehicle
– How to invest money
– Select medicine to give to a patient
– Estimate a parameter vector (may represent tempurature, distance etc.)
• Basic Principles of Bayesian Decision Theory
• Basic Principles of Bayesian Decision Theory
• Minimise expected loss or equivalently.
• Maximise expected utility
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30. Example
• Choosing a Course:
• A Student wants to decide whether to take a course or not.
• Suppose there are three courses namely Good, Fair and Bad
• Probability for Good Course is 0.3, for Fair course 0.3 and for Bad course
is 0.4.
• If loss function is Good Fair Bad
Take 0 5 30
• Should he then take the course?
• Expected utility will be; (in this case expected loss)
• For taking course: (0.3x0)+(0.3x5)+(0.4x30) = 10.5
• For not taking course: (0.3x20)+(0.3x5)+(0.4x0) = 7.5
• The conclusion is the students should not attend the course because the
expected utility is low. We often study loss function instead of utility.
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Not take 20 5 0
31. Optimal Bayesian Decisions
• 1. Minimise the posterior expected loss
• To make an optimal Bayesian Decision it is sufficient to know;
• The prior probability likelihood and a loss function.
• The likelihood probability and a loss function
• The posterior distribution and a loss function
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