BUSI 2311U Chapter Notes - Chapter 7: Prospect Theory, Self-Justification, Sunk Costs
Document Summary
Decision making: the conscious process of making choices among alternatives with the intention of moving towards some desired state of affairs. Rational choice paradigm: the view in decision making people that should and typically do use logic and all available information to choose the alternative with the highest value. Subjective expected utility: the probability (expectancy) of satisfaction (utility) resulting from choosing a specific alternative in a decision. Stakeholder framing: employees, suppliers, customers, and other stakeholders preset (or hide) information in ways that makes the decision maker see the situation as a problem, opportunity, or steady sailing. Solution focused problem: decision makers do recognize that the situation required a decision, they sometimes describe the problem. Perceptual defense: people sometimes fail to become aware of problems because they block out bad news as a coping mechanism. Mental models: decision makers are victims of their own problem framing due to existing mental models.
