COMMERCE 1BA3 Lecture Notes - Lecture 8: Bounded Rationality, Satisficing, Irreversible Process
2 Aug 2016
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The process of developing a commitment to some course of action -escalation of commitment (theory) Humans increase their commitment to a decision the more they put in time, money, and ego. Identify problem - which uni to do undergrad; look at every single uni. Perfect: completely informed, perfectly logical, and oriented towards economic gain. Economic person who is a perfect, cool, calculating, decision-maker. ****bounded: relies on limited info and that reflects time constraints and political considerations. 9 reasons why bounded/ or not perfectly rational/why our brains don"t make rational decisions: Framing: how a problem is framed or worded can lead us to certain conclusions/decisions; we fall for them; ex: referendum in politics; gain/lose language. Problems in how we search info: (pg390) hard data job search: everything you can read about the company, but they don"t tell you and you don"t investigate. Soft data research: investigating why the position has been filled 5 times.
