Bounded Rationality in Education
Introduction I am inspired most by the cognitive bias and the risk control of the decision- making while learning this course. Having been engaged in the financial industry for years, I am deeply aware of the fact that most individual investors tend to perform those bounded rationalities for characteristics of decision-making while making investment, but I can’t find out the reason for their existence. After learning this course, however, I feel suddenly enlightened. The phenomenon that has bothered me so long is caused under the influence of the cognitive bias and emotion which will affect the risk assessment and judgment made to the investment object. In western countries, most families make investment mainly in dominant financial assets including stock, bond, real estate and insurance and have strong awareness of the risk averse in above fields. Meanwhile, there’re many organizations and books about the decision-making that are referred to by the individual investor. In Chinese families, in addition to the above investment of the financial assets, the investment of the family education, as a special form which involves all Chinese people, takes a large proportion. This is because a long-term funding is made by parents ever since their kids are born as a result of the non-free education in China. “Never let children lose at the starting line” and “education is the largest investment” are two popular education ideas in our country, which comprehensively inflect the current situation of Chinese families’ investment to the children education. As parents put the entire earning into their kids, a good return is surely expected. But since income is companied with risk, Chinese education investment, therefore, belongs to the risk investment and, meanwhile, has the specific characteristic that is not covered in western theory. The invest object in this essay is mainly about the education domain in China, I think it’s also necessary to apply the theory
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