mgmtch12 - Rational decision: identify problem, generate...

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Rational decision : identify problem, generate alternative solutions, evaluate/select solution, implement/evaluate solution Research indicates dec. makers do not follow series of steps outlined in rational model. Simon’s normative model : guided by decision makers’s bounded rationality. Bounded rationality: decision makers are bounded/restricted by variety of constraints when making decisions. Normative model suggests that decision making is characterized by: a)limited info. processing b). use of judgmental heuristics and c). satisficing Garbage can model : based on assumption that decision making is sloppy and haphazard. Decisions result from interaction between 4 independent streams of events: problems, solutions, participants, and choice opportunities. 8 Decision making biases : dec. making bias occurs as result of using judgmental heuristics. 8 Biases affecting decision making: 1. availability.heuristic: pre decision maker’s tendency to base decisions on info that is readily available from memory 2. representativeness: used when people estimate prob. Of event occurring based on similar occurrences. 3. confirmation: 2 components (decide subcons before investigating why it’s right and seeking info that supports point of view) 4. anchoring (intial info, impressions, etc anchor subsequent judgments 5. overconfidence.: tendency to be overconfident about estimates 6. hindsight: knowledge of outcome influences belief about prob. That we could have predicted outcome earlier. 7 framing: manner in which question is posed. 8. escalation of commitment: tendency to stick to ineffective course of action when its
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