D46 - Value TheoryReturn

The qualitative changes in surroundings for companies operation are calling for necessity of assertion new tools and method, which will help to increase the quality of decision making and firm evaluation. To these tools belong scenarios and Monte Carlo simulation. The aim of the article is to describe these tools, their common features and differences, advantages and disadvantages. Further results and benefits of application of Monte Carlo simulation in risk analysis of investment project from economic practise are demonstrated.

The relatively new stream of research on various types of utilities is reviewed and discussed together with some of its implications. The distinction is explained among experienced utility, remembered utility and predicted utility as three candidates for decision utility. Examples of selected empirical findings are given which show discrepancies, first, between past experienced utility and remembered utility and, second, between predicted utility and actual future experienced utility. Some critical reactions to the findings are briefly mentioned as well as implications for the debate on some important moral issues such as paternalism and HIV testing. It is concluded that there may be some methodological doubts about the empirical evidence available so far but even so, the evidence indicates that the tendency of models in economics to work with "the" utility to be maximised may be an overly simplified picture of the actual process of evaluation of outcomes.