The collapse of the housing bubble and the mortgage crisis has led to severe repercussions felt throughout the national and global economy. Numerous businesses, from the smallest neighborhood grocery store to financial mega-powerhouses have been affected. Read the following article about the crisis, and then after reviewing the required background materials; reviewing the optional materials, if desired; and conducting additional research (if required to supplement your understanding of the financial crisis); write a 2 PAGE essay addressing the following questions:
From the viewpoint of expected utility theory, should this situation ever have developed in the first place?
How did bounded rationality on the part of buyers and lenders contribute to the underlying causes of the housing crisis of 2008, which is still being felt today?
Clark, A. (2009). Mortgage Crisis Analysis – What Caused the Mortgage Crisis? Ezine @rticles. http://ezinearticles.com/?Mortgage-Crisis-Analysis—What-Caused-the-Mortgage-Crisis?&id=1528096 -ATTACHED
For this Assignment, you will:(1) apply effective communication skills in a business environment, (2) assess the ethical implications of business decisions and actions, and (3) apply business theories, models, and concepts to guide analysis of problems and situations.
Following videos are background references:
Conversations with History. (2008) Intuition and Decision-making: Daniel Kahneman The Intstitute of International Studies, University of California, Berkeley