09 28 Lecture 10

09 28 Lecture 10 - Deck- 09/28/2011 Foundations of Decision...

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Deck- 09/28/2011 Foundations of Decision Making and Problem Solving Spectacularly bad decisions 1972- Watergate scandal involving Nixon 1986- Challenger space shuttle disaster Bill Clinton has lewd sex involving pussies and cigars Spectacularly good decisions Bloombury, a book publisher, agrees to publish Harry Potter. 13 other publishers declined to publish the book. 72,000,000 copies of book #7 were sold alone Decision-making and problem solving Decision - choice made from a set of available alternatives Problem - a discrepancy (gap) between existing and a desire state Rational decision making assumptions All alternatives and consequences are known There are no time or cost constraints Final choice will be optimal This works in an ideal world BUT in reality: o Bounded rationality - we do not have unlimited time or costs. o Satisfice - make best decision with information that is reasonable to attain to make a good decision—is not usually the optimal choice
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09 28 Lecture 10 - Deck- 09/28/2011 Foundations of Decision...

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