The main issue that Dave Armstrong is facing is to come up with the best possible decision for his future job. The PROACT model applies to this situation where Dave faces a decision that involves creating objectives, analyzing alternatives, consequences, and tradeoffs of each job, and considering his risk tolerance to each of the scenarios. Due to the contrast effect, the job offers all by themselves would make them easier to pick from, but contrasting them to one another put Dave into a dilemma. Starting with Job A, Dave is eager to choose it due to the concept of homo-economicus, where he specifically says, “Job A is the one I really want, since it has the most upside potential.
” Dave’s thought of gaining 50K-70K plus the profit sharing makes this job prospect his most favorable. On the other hand, he is hesitant due to the idea of bounded-rationality, where he is not only thinking of the profits, but also he is fearful and worried with the time constraint that he has with regards to to his decision making process. Also, the availability of heuristic might effect certain stages of his decision. Dave could have some potential distress in making a bad decision to work for Mr. Thorne since he already worked for him. Sunk cost error might be a consequence where he might lose more money than his initial investment if things go wrong. In terms of Job B, Dave is thrilled to meet a lot of potential buyers and enter into equity deals with them in the future to make long-term businesses.
However, his overconfidence might be an issue because he is tending to overlook that investors might oversee him and not be interested in a long-term business. Lastly for Job C, it seems like the safest opportunity but in the other hand it won’t open up for a while but he would get $45K for another job until then.