The decision a person takes has impact on everything she does. Whatever decision is taken, a certain amount of risk is associated to it. To make the most suitable decision it is necessary that a business owner takes the correct approach to the decision making process. In every decision, unknown components enter that are beyond the control of the decision making person. In order to make better decisions, a person evaluates some of these unknown components and the potential result of each of these unknowns. In this article, we will discuss about cautiousness and courageousness. It will be a study in risk preference and risk propensity.
The amount of risk taken and the extent of success achieved are only estimates. They are thus, a part of the decision maker’s perception. If the decision maker has a tendency to take risks, her perception will be influenced by her attitude.