ADMS 1000 Lecture Notes - Lecture 3: Prospect Theory, Bounded Rationality, Blackberry 10

• School: York University
• Department: Administrative Studies
• Course: ADMS 1000
• Professor: Indira Somwaru

Document Summary

Rational decision making is a systematic series of stages that are used to attain goals of an organization or personal goals. Rational decision model has more of routine decisions. [programmed decisions], which are ongoing decisions that take place in an organization such as ordering ketchup when supply has reduced. Moreover rational model has been referred to serve as a prescription for how the organizational decision makers should make decisions. However it does have some assumptions, whereby it assumes that decision makers have all the alternatives and also assumes that there is complete knowledge of all alternatives and its outcomes to a decision. On the other hand non-rational decision making considers the prospect theory and the non-rational theory. Prospect theory attempts to describe the relationship between economic and physiological value that individuals actually display when faced with making decisions under circumstances of risk and uncertainty.