Reference no: EM132617291

According to Libby (1981), in most decision making situations, judgement about environment must be made in the absence of direct contact with the event to be judged. In such circumstances, "most likely" judgements are formed on the basis of information cue whose relationships to the event are imperfect or probabilistic. That is judgements and decisions are made under conditions of uncertainty about the relationships between cues and events.

The model below is Brunswick Lens Model which portrays the decision making process under uncertainty ie. the graduate business school admission decision.

Required:

Problem (a) Refer to the diagram of Brunswick Lens Model, explain how a decision-making process occurred in recruiting a suitable candidate to join a program and ultimate complete the study. Your explanation refers to:

1. the decision made with subject separate by time. 
2. the decision making process faces with multiple overlapping cues which are imperfect predictors where probabilistically combine these cues to form a judgement occurs. 
3. decision making under uncertainty involves judgmental achievement.

Problem (b) Explain your answer based on the following statement:

"If the results of behavioural research indicate that a particular accounting-related information item (cue) is not used by individuals when making decisions, should this be grounds for the accounting profession to conclude that such information is not material and therefore does not warrant the related development of mandatory disclosure requirements"