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  • Improving Strategic Decision Making: Behavioral Economics ......H. Shefrin, March, 2001 13 Today’s panel Dr. Carl Spetzler Chairman and CEO Strategic Decisions Group Program Director
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Improving Strategic Decision Making: Behavioral Economics and Risk Management RMG401 RIMS 2011 Vancouver, BC, Canada May 4, 2011 Emanuel Lauria Managing Director Vice Chairman, Wells Fargo Risk Management SoluDon Group Welcome to RIMS 2011 Annual Conference & Exhibition

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  • ImprovingStrategicDecisionMaking:BehavioralEconomicsandRiskManagement

    RMG401RIMS2011

    Vancouver,BC,CanadaMay4,2011

    EmanuelLauriaManagingDirectorViceChairman,WellsFargoRiskManagementSoluDonGroup

    Welcome to RIMS 2011 Annual Conference & Exhibition

  • RMG401|Sessiongoals

    •  DrawyouraGenDontocorecompetencyofeffecDvestrategicdecisionmaking

    •  ProvideaframeworkandafoundaDonforthelatestthinkingandresearch

    •  PresentariskmanagementmethodologythathelpstoshapedecisioneffecDveness

    •  Encourageyoutodigdeeperintothefieldtoincreaseyourpersonalcompetency

    2

  • Let’stakeapictureViewyouownjobresponsibili0esasariskmanagementprofessionalthroughadecisionmakinglens–whatdoyousee?•  risk,uncertainty,upsideoropportunity,dependinguponhowyourelatetothose

    terms•  processesatplay:consciousandunconscious,informalandformal•  degreesofdifficulty:“nobrainer”to“bigbrainer”•  ameasureofimpact:decisiontouchesaliGlevs.touchesalot(ex.-launchnew

    globalcostofriskallocaDonprocess)•  materiality:underscopevs.boardsignoff(ex.-wriDngthird-partybusinessinyour

    capDve)

    3

  • Zoomout

    4

    Pickuponthedecisionsmadeineverycornerofyourorganiza0on–whatdoyousee?

    ComplexityandinterconnectednessThereisadownstreamimpactonriskmanagementdecisionsyouneedtomake–compoundingeffectDecisionsshapedbyvarietyoffactors:operaDons,protocol,experience,culture,bestpracDces,nopracDces

    MayseeaERM/SRMapproachorsetofprocessesinfluencingDecisions+outcomesgoodandbad:GG/GB/BG/BB

  • Zoomin

    5

    Switchtoahigherresolu0onlens–whatdoyouseenow?

    -  asgranularityincreases,differencesandinconsistenciesinhowdecisionsaremade,individualbyindividual

    -  widevarietyofstrongandsubtleforces,influences,controls,andpaGernsatplay

  • What’sthepoint?

    1)Underscoretheobvious

    -decisionmakingisatthecoreofmanagingrisk,bothfromyoursphereofdirectresponsibility,andthoughmulDpleinputchannelsacrossyourorganizaDons,and

    2)Proposetheimportant,whichis

    -understandingcertaincriDcalfactorswhichimpacthowstrategicdecisionsaremadeisanimportantkeytoimprovement

    6

  • Thenewlandscapeofdecisionmaking…Crea0onofwhatThomasDavenportinHBRcallsthe“newlandscape”ofdecision

    makingincludesthestudyofanumberofapproaches:

    •  smallgroupprocess:decisionmakinginvolvingfewpeople•  analyMcs:usingdataandquantanalysistosupportdecisionmaking•  automaMon:employingdecisionrulesandalgorithms•  intuiMon:relyingonyourgut•  wisdomofcrowds:converseofsmallgroup-surveysormarketsoflargegroups

    areemployedfordecisionmaking

    7

  • …plustwomore...

    8

    Neuroscience:learningfrombrainresearchthatilluminatesdecisionmakingprocesses

    and...

  • ...behavioraleconomics

    9

  • Behavioraldecisionscience

    Howmanyhaveheardoforarefamiliarwiththetermsbehavioraleconomicsorfinance?

    -usuallyincontextofindividualinvestors,andwhethertheirinvestmentdecisionsaretrulyraDonalandoccurinanefficientmarketenvironment,e.g.,pickingstocks-whereeconomics,financeandpsychologyinteract-makealeapfromapersonalfinance,behavioraleconomicscontexttoorganizaDonalapplicaDonsandtherisks,decisionandperformancedynamicsforwhichyouareresponsible

    10

  • Behavioraldecisionscience,cont.

    Howmanyhaveheardoforarefamiliarwiththetermsbehavioraleconomicsorfinance?

    -usuallyincontextofindividualinvestors,andwhethertheirinvestmentdecisionsaretrulyraDonalandoccurinanefficientmarketenvironment,e.g.,pickingstocks-whereeconomics,financeandpsychologyinteract-makealeapfromapersonalfinance,behavioraleconomicscontexttoorganizaDonalapplicaDonsandtherisks,decisionandperformancedynamicsforwhichyouareresponsible

    11

  • Behavioraldecisionscience,cont.

    BringaKen0ontotheminditselfandtheimpactofCOGNITIVEBIASESondecisionmaking

    •  adistorDnghabithard-wiredintoourbrains•  systemaDctendencytodeviatefromraDonalcalculaDon•  simplyshorthanddevice-percepDons,personalitytraitsandpsychological•  examples

    overconfidence-inknowledgeandability excessiveopDmism-“rosecoloredglasses”;overweightprobabilityof favorable,anditsconverse anchoring-“geengstuck”;powerofiniDalideaordataonfuture views groupthink-drivingconsensusbydiscouragingdissenDngviews

    12

  • Emergenceofbehavioraldecisionscienceliterature

    “MakeBeSerDecisions” T.Davenport,HarvardBusinessReview,November2009

    “EvolveorDie”Opera=onalRisk&Regula=on,February2009

    “TheCaseforBehavioralStrategy”McKinseyQuarterly,March,2010

    “BP’sFailuretoDebias:TheImportanceofBehavioralCorporateFinance”H.Shefrin,March,2001

    13

  • Today’spanel

    Dr.CarlSpetzler

    ChairmanandCEOStrategicDecisionsGroup

    ProgramDirector

    StanfordStrategicDecisionandRiskManagement

    ImprovingStrategicDecisionMaking:BehavioralDecisionScienceandRiskManagement

    14

  • Today’spanel

    Mr.HansLæssøe

    SeniorDirectorStrategicRiskManagement

    LegoSystemA/S

    ImprovingStrategicDecisionMaking:Crea=ngaRiskAwareMindset

    15

  • AS PART OF RIMS GREEN INITIATIVES, THERE ARE NO PRINTED HANDOUTS. VISIT WWW.RIMS.ORG/2011HANDOUTS TO DOWNLOAD AVAILABLE HANDOUTS.

    PRINTING ON DEMAND STATIONS ARE AVAILABLE IN LEVEL 1 LOBBY

    OF THE VANCOUVER CONVENTION CENTRE, AS WELL AS IN RIMS CYBER STATIONS LOCATED IN BOOTHS #227 AND #1931 IN THE EXHIBIT HALL.

    Welcome to RIMS 2011 Annual Conference & Exhibition


Corporate Strategic Planning - Corporate Strategic PlanningCorporate Strategic PlanningCorporate Strategic PlanningCorporate Strategic Planning

Stereotactic radiosurgery for Spetzler-Martin Grade IV and

CONSENT FOR TREATMENT AND HEALTH CARE OPERATIONS › 4ed209f8 › files...CONSENT FOR TREATMENT AND HEALTH CARE OPERATIONS I, _____, hereby authorize, Russell Shefrin ,Ph.D. (Name

Lecture 14 Behavioral Finance. The primary source of this lecture is from the book by Hersh Shefrin, “Beyond Greed and Fear; Understanding Behavioral

Driving performance, of our non-stick bipolar forceps resist tissue buildup and provide excellent visualization. Regardless of your preference for single-use Spetzler-Malis or reusable

LAWTON DEEP CAVERNOUS MALFORMATION … IN CONJUNCTION WITH DR. MICHAEL T. LAWTON President and CEO Chair, Department of Neurosurgery Robert F. Spetzler Neuroscience Chair at Barrow

Notes, Comments, and Letters to the Editor Information and …qed.econ.queensu.ca/pub/faculty/milne/870/Milne Shefrin... · 2015. 5. 13. · H. M. SHEFRIN Department of Economics,

On the relevance of Born theory in global seismic tomographygeodynamics.usc.edu/~becker/preprints/BBSD2005.pdf · Born theory (in Spetzler et al.’s (2002) 2-D formulation, and applied

Strategic Questions Strategic Answers Strategic Bridges

2000_Behavioral Portfolio Theory - Shefrin & Statman

EXPLAINING INVESTOR PREFERENCE FOR CASH DIVIDENDS* · 2019-07-05 · H. M. Shefrin and M. Statman, Explaining investor preference for cash dividends 255 concludes that ‘no dominant

Impact of molecular profiling on overall survival of ... · Impact of molecular profiling on overall survival of patients with advanced ovarian cancer Thomas J. Herzog1, David Spetzler

Strategic alert control strategic control - strategic implementation

Volume, Volatility, Price, and Profit When All Traders Are ...Shefrin and Statman ~1994! develop a model in which traders infer, from past observations, the transition matrix governing

STUDY SESSION 1 3 StudyGuide(2010).pdf · Beyond Greed and Fear: Understanding Behavioral Finance and the Psychology of Investing, by Hersh Shefrin Reading 8 Frame Dependence: The

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Source: The Journal of Financial and Quantitative Analysis ...efinance.org.cn/cn/fm/Behavioral Portfolio Theory.pdf · Behavioral Portfolio Theory Author(s): Hersh Shefrin and Meir

The Disposition to Sell Winners Too Early and Ride Losers ...people.bath.ac.uk/mnsrf/Teaching 2011/Shefrin-Statman-85.pdf · Title: The Disposition to Sell Winners Too Early and Ride

Coming up Short: Managing Underfunded Portfolios …2 Behavioral portfolio theory, developed in Shefrin and Statman [2000], describes goal-driven investors, seeking to maximize expected

Behavioral Finance in the Financial Crisis: Market ... · PDF file1 Behavioral Finance in the Financial Crisis: Market Efficiency, Minsky, and Keynes Hersh Shefrin Meir Statman Santa

Behaviouralizing Finance CARISMA February 2010 Hersh Shefrin Mario L. Belotti Professor of Finance Santa Clara University

Durham Research Online - COnnecting REpositories · 2012. 3. 26. · Shefrin, Beyond Greed and Fear – Understanding Behavioral Finance and the Psychology of Investing (Oxford, Oxford

Driving performance, · excellent visualization. Regardless of your preference for single-use Spetzler-Malis or reusable SILVERGlide, you can expect . precision, control. and a responsive

Teaching Teens How to Make Good Decisions - create.usc.edu · A team of three — Ali Abbas, Carl Spetzler and Steve Tani — taught the course. ... in her own apartment. But where

Ambiguity, Risk, and Dividend Payout Policy · interpret uncertain probabilities). In related work, Shefrin and Statman (1984) examine the e ect of managers’ perceived probabilities

Seasonal Variation in Treasury Returns - Lisa Kramerlisakramer.com/papers/kkl2015-cfr.pdf · Seasonal Variation in Treasury Returns Mark J. Kamstra, ... For example, Shefrin (2008,

Groningen seismic dataset - SHEER project seismic dataset Elmer Ruigrok, Bernard Dost, Jesper Spetzler,Laslo Evers, Gert-Jan van den Hazel, Jordi Domingo Ballesta. Induced seismicity

Gulnur Muradoglu1 Behavioural Finance Prospect Theory and Loss Aversion Session 3: Read Shefrin and Statman, 1984 Kahneman and Tversky, 1979

Product catalog - Stryker Corporation...9 Spetzler claw Spetzler micro claw long Spetzler micro claw superlong Spetzler open angle micro claw 5450-800-311 3.8in (9.7cm) 2.0mm 2.8mm

Yo 3) —Value & Growth Jll Hersh Shefrin _E Meir Statman Ll_l 2 (YcØ2) 7 7 Y IQ (DC F) David E. Tierney Jeffery V. Frank EH DDM Bailey

Pres 131 carl spetzler july 27 2016

Endocrinology - University of Texas Medical Branch · PDF fileGeneral Principles of Endocrinology ... Koos, W.T.; Spetzler, R.F. Color Atlas of Microneurosurgery. Thieme. New York,

Portfolio Optimization Utilizing the Framework of Behavioral Portfolio Theory · 2019. 7. 17. · Shefrin and Statman (2000), and Das et al. (2010) about the new mental accounting

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