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By Sebastian Serfas

In today’s aggressive enterprise atmosphere, an optimum funding method is essential for each corporation. in spite of the fact that, it is usually endangered through subconscious psychological biases inherent in each person. construction on findings from cognitive psychology examine, Sebastian Serfas indicates intimately that and the way those so-called cognitive biases systematically have an effect on and warp capital investment-related determination making and company decisions. He presents various examples that each company practitioner may come upon each day, demonstrates the dangerous results via quite a few empirical experiments, and descriptions strength counterstrategies to mitigate those detrimental effects.

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Additional info for Cognitive Biases in the Capital Investment Context: Theoretical Considerations and Empirical Experiments on Violations of Normative Rationality

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97 Some other challenges that are frequently brought up in discussions of the NPV method – for example with regard to forecasting and data collection requirements – actually apply to all investment appraisal methods and are therefore not real disadvantages of the net present value approach, nor of any other particular appraisal method. 91 92 93 94 95 96 97 See for example Götze et al. (2007: p54) or Röhrich (2007: p64f) for details on the decision rules of NPV in different settings. See for instance Atrill/McLaney (2002: p204) or Watson/Head (2007: p161).

Computational cognitive science: highly interdisciplinary approach143 4. that focuses on computational models and artificial intelligence. Applied cognitive psychology: practice-driven approach that focuses on solving real-life problems and employs primarily real-world rather than laboratory experiments. 5. 142 143 Cognitive neuroscience: applies various brain-imaging techniques and technologies to analyze the structure of the brain and its functions. Based on a synthesis of the definitions and descriptions in Eysenck (2006: p4ff), Andrade/May (2004: p14ff), and Brown (2006: p6ff).

97 Some other challenges that are frequently brought up in discussions of the NPV method – for example with regard to forecasting and data collection requirements – actually apply to all investment appraisal methods and are therefore not real disadvantages of the net present value approach, nor of any other particular appraisal method. 91 92 93 94 95 96 97 See for example Götze et al. (2007: p54) or Röhrich (2007: p64f) for details on the decision rules of NPV in different settings. See for instance Atrill/McLaney (2002: p204) or Watson/Head (2007: p161).

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