Darryl Laws
Methodology for conducting literature search for review.
The vast majority of the research papers that I selected were found using Google Scholar to find specific authors whom were listed in the respective bibliographies of papers which were designated as course readings. Example. Global Business and the Economics of Information (EDBA 798 C1 & C2), Prof. David Smith assigned an article written by Prof. Vincent P. Crawford; entitled New Directions for Modeling Strategic Behavior: Game Theory Models of Communication, Coordination and Cooperation in Economic Relationships (2016) that gave me the inspiration to tackle the topic of
behavioral economics and game theory. The refence list in Professor Crawford’s paper led me to articles by: Robert Aumann, Matthais Blodenski, Prof. Gary Charness, Prof. Prof. David Cooper and Prof. John Nash amongst others. I then turned to accessing articles online via the various platforms associated with the Pepperdine library, SCOPUS, ProQuest, Business Source Premiere and EBSCO platform online via the Pepperdine Library. Unfortunately, this later source was not very helpful.
Additionally, I began discussing irrational behavior and game theory with other DBA students in my cohort that pointed me to Prof. Dan Ariely at Duke University and to the Nobel Prize winning economist, Prof. Vernon Smith, at Chapman University. Provided further direction by Prof. David Smith, I researched various economic journals published in the U.K. , U.S. and Europe and found recent relevant articles, thesis and dissertations. As I began to expand my reading list and I culled it to focus upon three themes; irrational human behavior, mergers and acquisitions and the application of game theory tactics within specific context. Over the course of my readings I discovered that Prof. Vincent Crawford’s articles were vastly becoming my personal foundation of knowledge of behavioral economics and game theory; Lying for Strategic Advantage: Rational and Boundedly Rational Misrepresentation of Intentions (2003), A Survey of Experiments on Communication via Cheap Talk (1998) and Theory and Experiment in the Analysis of Strategic Interaction (1997) and that his theories coupled with those of other authors such as Prof. Gary Charness, UC Santa Barbara, provided me with a broader perspective of how these theories are applicable in a practical setting such as the business world.
Irrational behavior in decision-making. Classical economic theory assumes that individuals are rational. However, in the real world, we often see irrational behavior decisions which don’t maximize utility but can cause an economic loss. Irrational behavior is not just isolated to a few irrational individuals but can become the dominant choice for most people in society (e.g. the Tulip mania). Irrational behavior decision-making is exhibited when the decision-maker is himself / herself is not rational, regardless whether complete information is available to him or not. He / she makes the decision based on his cognitive behavior such as greed, fear, overconfidence, hubris and or their gut intuition. Though irrational decisions are based on the argument of cognitive behavior of decision-makers, that does not make it wrong. It’s defining qualities are that it occurs outside conscious thought and is emotionally charged. However, emotions can very well compliment rational decision choices (as in a game of chess where experiments depict that a novice and expert demonstrate the same level of memory if the pieces are kept random). While irrational decision-making may be valuable in making good decisions, we cannot rely on it, because it is unquantifiable Bernard (1938). Bernard posits, it is not capable of being expressed in words or as reasoning, which are only made known by a judgment, thus it is hard to know when our hunches are right or wrong. The key is not to either rely solely on irrational decision but to supplement it with evidence and good judgment.
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