MHR 523 Chapter Notes - Chapter 7: Bounded Rationality, Availability Heuristic, Tacit Knowledge
18 Apr 2016
School
Department
Course
Professor
Document Summary
Mhr chapter 7 decision making and creaivity. Decision making is the process of making choices among alternaives with the intenion of moving towards some desired state of afairs. Raional choice paradigm says the best decisions use pure logic and all available informaion to choose the alternaive with the highest value such as highest expected proitability, customer saisfacion, employee well-being, or some combinaion of these outcomes. The raional choice paradigm selects the choice with the highest uility through the calculaion of subjecive expected uility (seu). Seu is the probability (expectaion) of saisfacion (uility) resuling from choosing a speciic alternaive in a decision. The key point from this example is that all decisions rely to some degree on (a) the expected value of the outcomes (uility) and (b) the probability of those good or bad outcomes occurring (expectancy). Programmed decisions follow standard operaing procedures; they have been resolved in the past, so the opimal soluion has already been ideniied and documented.
