Behavioural Issues in Portfolio Decision Analysis

  • Barbara Fasolo
  • Alec Morton
  • Detlof von Winterfeldt
Part of the International Series in Operations Research & Management Science book series (ISOR, volume 162)


The aim of this chapter is to review some behavioural issues in portfolio choice and resource allocation decisions, with a focus on their relevance to Portfolio Decision Analysis. We survey some of behavioural literature on the most common heuristics and biases that arise in and can interfere with resource allocation processes. The common idea behind this behavioural literature is that of cognitive or motivational failure as an explanation for the violation of normative models. Then, we reflect on the relevance of this literature by drawing from the authors’ personal experiences as decision maker or decision analyst in real world resource allocation settings. We argue that justifiability can also be a reason for the normative violations. We conclude by discussing ways in which an analyst might approach debiasing.


Resource Allocation Environmental Restoration Resource Allocation Model Equal Allocation Individual Bias 
These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.


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Copyright information

© Springer Science+Business Media, LLC 2011

Authors and Affiliations

  • Barbara Fasolo
    • 1
  • Alec Morton
    • 2
  • Detlof von Winterfeldt
    • 3
  1. 1.Department of ManagementLondon School of Economics and Political ScienceLondonUK
  2. 2.Department of Management, London School of Economics and Political ScienceManagement Science GroupLondonUK
  3. 3.International Institute for Applied Systems AnalysisLaxenburgAustria

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