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Behavioral Assumption
The behavioral assumption is one of the basics theories in classical finance. The assumption is that, under their resource constraints, human attempt to maximize their utilities, which means biggest profit and outcomes. The two most important characteristics of the human under the behavioral assumption are rationality and self-interest Self-interest generally refers to a focus on the needs or desires (''interests'') of one's self. Most times, actions that display self-interest are often performed without conscious knowing. A number of philosophical, psychological, and economi .... References Finance theories {{Finance-stub ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Rationality
Rationality is the quality of being guided by or based on reasons. In this regard, a person acts rationally if they have a good reason for what they do or a belief is rational if it is based on strong evidence. This quality can apply to an ability, as in rational animal, to a psychological process, like reasoning, to mental states, such as beliefs and intentions, or to persons who possess these other forms of rationality. A thing that lacks rationality is either ''arational'', if it is outside the domain of rational evaluation, or ''irrational'', if it belongs to this domain but does not fulfill its standards. There are many discussions about the essential features shared by all forms of rationality. According to reason-responsiveness accounts, to be rational is to be responsive to reasons. For example, dark clouds are a reason for taking an umbrella, which is why it is rational for an agent to do so in response. An important rival to this approach are coherence-based accoun ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Self-interest
Self-interest generally refers to a focus on the needs or desires (''interests'') of one's self. Most times, actions that display self-interest are often performed without conscious knowing. A number of philosophical, psychological, and economic theories examine the role of self-interest in motivating human action. Individuals may have a self-serving bias towards their self-interest. In philosophy Philosophical concepts concerned with self-interest include: * Enlightened self-interest, a philosophy which states that acting to further the interests of others also serves one's own self-interest. * Ethical egoism, the ethical position that moral agents ''ought'' to do what is in their own self-interest. * Hedonism, the school of ethics which argues that pleasure is the only intrinsic good. ** Cyrenaics, the Aristippean pre-Socratic original. ** Epicureanism, a philosophical system related to hedonism. * Individualism, a philosophy stressing the worth of individual selves. * Ratio ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
