COMMERCE 1BA3 Lecture Notes - Lecture 10: Brainstorming, Bounded Rationality, Information Overload

• School: McMaster University
• Department: Commerce
• Course: COMMERCE 1BA3
• Professor: Firat Sayin

Document Summary

Process of developing a commitment to some course of action. Can be described as the process of problem-solving. Existing state is clear, desired state is clear, path from existing state to desired state is clear. Existing state is unclear and/or desired state is unclear and/or path/method is unknown. Perfect rationality decision strategy that is completely informed, perfectly logical, and oriented toward economic gain. Bounded rationality a decision strategy that relies on limited information and that reflects time constraints and political considerations. Framing aspects of the presentation of information about a problem that are assumed by decision makers. Confirmation bias the tendency to seek out info that confirms to one"s own definition of or solution to a problem. Information overload the reception of more information than is necessary to make effective decisions. Might lead to confusion and low quality decisions. Maximization the choice of the decision alternative with the greatest expected value.