SandraKendrick Memo

SandraKendrick Memo -...

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MEMO To: H.S. Watson, CEO of The Prietula Group From: Sandra Chan, Senior Consultant of Nudge Consultancy Kendrick Daniel, Senior Consultant of Nudge Consultancy Date: February 17 th , 2010 Subject: The psychological phenomenon of Temptation and Self Control Strategies Concept and Explanation: Humans have the tendency to display behavior that is dynamically inconsistent. The idea of dynamic inconsistency arises in a situation in which a decision maker’s preferences change over time. The preferences at one point in time are inconsistent with what is preferred at another time. The inconsistency between the preferences of a decision maker is partially attributable to the phenomena of temptation. According to the authors of Nudge , temptation is based on the idea that a person’s state of arousal varies over time. The varying states of arousal are characterized as “hot” and “cold.” In a “cold” state, forms of arousal such as hunger or anger do not affect a person. In a “hot” state, a person experiences feelings of arousal, which often leads to a state of impulsivity and altered decision making. This impulsiveness implies that context plays a major part in decision-making. Often, the decisions we make in the “cold” state cannot represent future decisions in the “hot” state correctly because we tend to underestimate the power of emotions in the “hot” state. In other words, your model in the “cold” state talking about the future is inconsistent in generating a decision about the future. A hypothesis bias exists when we make decisions about the future based on our current beliefs of that situation. The presence of temptation in decision-making brings forth the issue of self-control problems
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This note was uploaded on 11/27/2011 for the course BUS 451 taught by Professor Prietula during the Fall '10 term at Emory.

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SandraKendrick Memo -...

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