Abstract-The field of decision making can be loosely divided into two parts: the study of prescriptive models and the study of descriptive models. Prescriptive decision scientists are concerned with prescribing methods for making optimal decisions. Descriptive decision researchers are concerned with the bounded way in which the decisions are actually made. The statistics courses treat risk from a prescriptive, by suggesting rational methods. This paper brings out the work done by many researchers by examining the psychological factors that explain how managers deviate from rationality in responding to uncertainty.