Question
You are concerned that your organization does not take enough risk. Using the following principles: expected utility theory, prospect theory, and economic risk aversion theory.
You are concerned that your organization does not take enough risk. Using the following principles: expected utility theory, prospect theory, and economic risk aversion theory. Come up with a strategy for inducing more risk-taking. The strategy should not be something like: "increase the incentives for risk-taking". Instead, it should be more psychologically nuanced, reflecting some of the reasons why individuals in organizations might not naturally take as much risk as they should. Of course, you should be mindful of the costs (organizational, economic, or psychological) of introducing a new process.
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