Management and Organizational Studies 2181A/B Lecture Notes - Bounded Rationality, Confirmation Bias, New Coke
16 Dec 2013
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Document Summary
Decision making: the process of developing a commitment to some course of action. First, making a choice (carry more or less inventory) Second, process of how (why choose this offer) It is a process of problem solving: problem: a perceived gap between an existing state and a desired state. Involves the perception of the existing state, the conception of the desired state and the steps to get from one to the other. Enables the decision maker to go directly from problem identification to solution. Go under labels as rules, routines, procedures. Information search: problem identification, development of alternative solutions, evaluation of alternative solutions, solution choice, solution implementation, solution evaluation. Perfect rationality: a decision strategy that is completely informed, perfectly logical and oriented toward economic gain. (economic person) 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 that are assumed by decision makers.
