MGHB02H3 Chapter Notes - Chapter 11: Bounded Rationality, Sunk Costs, Confirmation Bias

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11 Dec 2013
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Decision making: process of developing a commitment to some course of action. Well-structured problem: existing state is clear, the desired state is clear, and how to get from one state to the other is fairly obvious. Programs rules, routines, standard operating procedures, rule of thumb. Ill-structured problem: existing and desired states are unclear and the method of getting to the desired state is unknown. High risk and stimulate strong political consideration. The compleat decision maker a rational decision-making model. Perfect rationality: completely informed, perfectly logical, and oriented toward economic gain. Bounded rationality: relies on limited info and that reflects time constraints and political considerations. Framing: aspects of the presentation of info about a problem that are assumed by decision makers. Cognitive biases: tendencies to acquire and process info in an error-prone way. Perceptual defence: perceptual system may act to defend the perceiver against unpleasant perception.

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