Expectation theory explains the decline of recruiters' performance.

1, management psychology theory

Expectation theory, also known as "price-means-expectation theory",

Expectation theory

The relationship between this demand and goal is expressed by the following formula:

Incentive force = expected value × potential

This relationship between requirements and objectives is expressed by a process model:

"Personal effort → personal achievement (performance) → organizational reward (salary) → personal demand"

2. Behavioral finance theory

Expectation theory is an important theoretical basis of behavioral finance. Kahneman and Tversky( 1979) found that most investors are not standard financial investors but behavioral investors, and their behaviors are not always rational and risk-averse. According to expectation theory, the utility function of investors to income is concave function, while the utility function to loss is convex function, which shows that investors are more risk-averse when investing in book value loss, and their satisfaction will slow down with the increase of income when investing in book value profit.

Expectation theory has become a representative theory in behavioral finance research, which has been used to explain many abnormal phenomena in financial markets, such as Alai paradox, the mystery of equity premium and option smile. However, Kahneman and Tworsky did not give the reference point and concrete form of the value function in the expectation theory, which is the key to determine the value function, which has great defects in theory, thus greatly hindering the further development of the expectation theory.