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Investor Expectations in Value Based Management pp 35–46Cite as

Expectations in the Theory of Economics

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Abstract

One of the most significant factors affecting investors’ decisions are expectations concerning the future. In economics expectations are defined as forecasts of future events, which influence decision-making. The first known mention of economic expectations was recorded in Ancient Greece. In Politics, Aristotle wrote about Thales of Miletus (636–546 BC) who made considerable profit from an accurate forecast of future olive harvest.

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Notes

  1. 1.

    Research confirming differences in the perception of probability can be found, among others, in studies by Sokołowska J (2005) Psychologia decyzji rynkowych. Ocena prawdopodobieństwa i modele wyboru w sytuacji ryzykownej, Academica, Warsaw, Tyszka T and Zaleśkiewicz T (2001) Racjonalność decyzji. Pewność i ryzyko, PWE, Warsaw, p. 177–184.

  2. 2.

    Loewenstein G and Lerner J S (2003), The role of affect in decision-making [in:] Davidson R, Goldsmith H, Scherer K, Handbook of Affective Science, Oxford University Press, Oxford, p. 619–642; Rick S, Loewenstein G (2008) The role of emotion in economic behavior [in:] Lewis M., Haviland-Jones J., The Handbook of Emotion, Guilford, New York, p. 138–156; Shiv B., Fedorikhin A., Nowlis S. (2005) Interplay of the heart and mind in decision-making [in: ] Ratneshwar R., Mick D., Inside Consumption: Frontiers of Research on Consumers Motives, Goals and Desire, Routledge, New York, pp. 166–184; Slovic P., Finucane M., Peters E., MacGregor D (2002) Rational Actors or Rational Fools: Implication of the Affect Heuristic for Behavioral Economy, “Journal of Socio-Economics”, No 31/2002 p. 329–342; Vohs K.D., Baumeister R.F., Loewenstein G. (2007) Do Emotion Help or Hurt decision-making? A Hedgefoxian Perspective, Russell Sage Foundation Press, New York, Zaleśkiewicz T. (2001) Beyond Risk Seeking and Risk Aversion: Personality and Dual Nature of Economic Risk Taking, “European journal of Personality”, No. 15/2001, p. 105–122.

  3. 3.

    Cf. Isen A M (2005) Pozytywny afekt a podejmowanie decyzji [in:] Lewis M, Haviland-Jones J. M. Psychologia emocji, GWP, Gdańsk, p. 527–549.

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  1. Warsaw School of Economics Institute of Value Management, Warsaw, Poland

    Magdalena Mikołajek-Gocejna

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  1. Magdalena Mikołajek-Gocejna
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Mikołajek-Gocejna, M. (2014). Expectations in the Theory of Economics. In: Investor Expectations in Value Based Management. Springer, Cham. https://doi.org/10.1007/978-3-319-06847-3_2

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