Compare and contrast standard Expected Utility theory and Prospect Essay

Compare and contrast standard Expected Utility theory and Prospect theory - Essay Example Standard expected utility theory represents preference over risky objects, by weighted average of utility assigned to each possible outcome, where the weights are the probability of each outcome (Expected Utility Theory, 2008). This theory analyses all the risk factors before taking decisions. For example, investments in share markets may yield a good return or a big loss. But investments in term deposits may guarantee a fixed return. Thus many of the investors opt for the investments in term deposits in order to avoid risks in investing in share markets. Prospect theory on the other hand analyses decisions among alternatives which involve risks. â€Å"Under prospect theory, value is assigned to gains and losses rather than to final assets; also probabilities are replaced by decision weights† (Prospect Theory, n. d). For example, investments in share market and mutual funds involve risks. But compared to share market investment, mutual fund investment are safer. Prospect theor y thus helps people to take proper decisions among the risky alternatives available. This paper compares and contrast Standard expected utility theory and prospect theory. Sebora (1995) has mentioned that expected utility theory suggests that choices should be made by weighing the outcomes (gains or losses) of actions by their probabilities and the alternative which has the maximum utility should be selected. Prospect theory, on the other hand, indicates that, decision makers prefer to simplify their choices cognitively whenever possible, satisfying rather than maximizing (Sebora, 1995, p.4). Gain or losses is given more emphasise in expected utility theory. Big gains expected with high risks will be given least preferences compared to small gains with least risks according to the expected utility theory. For example, consider a person with the choices of getting an excellent salaried job with high risk and a moderately salaried job with low

Evaluating a Website for Credibility Guidelines with Scoring Rubric Assignment

Evaluating a Website for Credibility Guidelines with Scoring Rubric - Assignment Example The website is quite simple to access because it only requires individuals to type the name of the government website in order to access (GOV.UK, 2014). In order to gain full entry right to access the website, the websites only require that an individual only type gov.UK as the search engine when accessing the website. The website being owned by the government, it provides reliable information of health that the citizens can apply in the daily activities whenever they develop symptoms that persist for quite some time. In this regard, the website endow with information to its citizens regarding the public health, social care, National Health Service, and public and emergency. The government web address is provided as: https://www.gov.uk/government/organisations/department-of-health. In the same context, the link provides an easy path when an individual’s access the website. This website is under the UK government, and this plays the role of ensuring that information regarding health matters is well-handled (GOV.UK, 2014). In addition, the website offers information relating to the public health; giving tips on staying healthy and shielding them against threats to their health. In the same context, the website offers information regarding social care; a few individuals require extra care and support which the government provides the tips on how to handle such issues. It is made quite easy to get the information of national service; this is because it is the command requirement to deliver to the people better results. The government owes the citizens the duty to offer quality public safety and emergency, funding and support for the local emergency service such as the police, fire, and ambulance service information is offered in the government website (GOV.UK, 2014). Content on the internet is unfettered, and anyone is allowed to