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psychology Psychology is the scientific study of mind and behavior. Psychology includes the study of conscious and unconscious phenomena, including feelings and thoughts. It is an academic discipline of immense scope, crossing the boundaries betwe ...
, decision-making (also spelled decision making and decisionmaking) is regarded as the
cognitive process Cognition refers to "the mental action or process of acquiring knowledge and understanding through thought, experience, and the senses". It encompasses all aspects of intellectual functions and processes such as: perception, attention, thought, ...
resulting in the selection of a belief or a course of action among several possible alternative options. It could be either
rational Rationality is the quality of being guided by or based on reasons. In this regard, a person acts rationally if they have a good reason for what they do or a belief is rational if it is based on strong evidence. This quality can apply to an abi ...
or irrational. The decision-making process is a reasoning process based on assumptions of
values In ethics and social sciences, value denotes the degree of importance of something or action, with the aim of determining which actions are best to do or what way is best to live (normative ethics in ethics), or to describe the significance of dif ...
,
preference In psychology, economics and philosophy, preference is a technical term usually used in relation to choosing between alternatives. For example, someone prefers A over B if they would rather choose A than B. Preferences are central to decision theo ...
s and beliefs of the decision-maker. Every decision-making process produces a final
choice A choice is the range of different things from which a being can choose. The arrival at a choice may incorporate motivators and models. For example, a traveler might choose a route for a journey based on the preference of arriving at a giv ...
, which may or may not prompt action. Research about decision-making is also published under the label
problem solving Problem solving is the process of achieving a goal by overcoming obstacles, a frequent part of most activities. Problems in need of solutions range from simple personal tasks (e.g. how to turn on an appliance) to complex issues in business an ...
, particularly in European
psychological research Psychological research refers to research that psychologists conduct for systematic study and for analysis of the experiences and behaviors of individuals or groups. Their research can have educational, occupational and clinical application ...
.


Overview

Decision-making can be regarded as a
problem-solving Problem solving is the process of achieving a goal by overcoming obstacles, a frequent part of most activities. Problems in need of solutions range from simple personal tasks (e.g. how to turn on an appliance) to complex issues in business an ...
activity yielding a solution deemed to be optimal, or at least satisfactory. It is therefore a process which can be more or less
rational Rationality is the quality of being guided by or based on reasons. In this regard, a person acts rationally if they have a good reason for what they do or a belief is rational if it is based on strong evidence. This quality can apply to an abi ...
or
irrational Irrationality is cognition, thinking, talking, or acting without inclusion of rationality. It is more specifically described as an action or opinion given through inadequate use of reason, or through emotional distress or cognitive deficiency. T ...
and can be based on
explicit Explicit refers to something that is specific, clear, or detailed. It can also mean: * Explicit knowledge, knowledge that can be readily articulated, codified and transmitted to others * Explicit (text) The explicit (from Latin ''explicitus est'', ...
or
tacit knowledge Tacit knowledge or implicit knowledge—as opposed to formal, codified or explicit knowledge—is knowledge that is difficult to express or extract, and thus more difficult to transfer to others by means of writing it down or verbalizing it. This ...
and beliefs. Tacit knowledge is often used to fill the gaps in complex decision-making processes. Usually, both of these types of knowledge, tacit and explicit, are used together in the decision-making process. Human performance has been the subject of active research from several perspectives: *
Psychological Psychology is the scientific study of mind and behavior. Psychology includes the study of conscious and unconscious phenomena, including feelings and thoughts. It is an academic discipline of immense scope, crossing the boundaries between t ...
: examining individual decisions in the context of a set of needs, preferences and values the individual has or seeks. *
Cognitive Cognition refers to "the mental action or process of acquiring knowledge and understanding through thought, experience, and the senses". It encompasses all aspects of intellectual functions and processes such as: perception, attention, thought, ...
: the decision-making process is regarded as a continuous process integrated in the interaction with the environment. *
Normative Normative generally means relating to an evaluative standard. Normativity is the phenomenon in human societies of designating some actions or outcomes as good, desirable, or permissible, and others as bad, undesirable, or impermissible. A norm in ...
: the analysis of individual decisions concerned with the logic of decision-making, or
communicative rationality Communicative rationality or communicative reason (german: kommunikative Rationalität) is a theory or set of theories which describes human rationality as a necessary outcome of successful communication. This theory, borne from the over inflation ...
, and the invariant choice it leads to. A major part of decision-making involves the analysis of a finite set of alternatives described in terms of evaluative criteria. Then the task might be to rank these alternatives in terms of how attractive they are to the decision-maker(s) when all the criteria are considered simultaneously. Another task might be to find the best alternative or to determine the relative total priority of each alternative (for instance, if alternatives represent projects competing for funds) when all the criteria are considered simultaneously. Solving such problems is the focus of
multiple-criteria decision analysis Multiple-criteria decision-making (MCDM) or multiple-criteria decision analysis (MCDA) is a sub-discipline of operations research that explicitly evaluates multiple conflicting criteria in decision making (both in daily life and in settings ...
(MCDA). This area of decision-making, although very old, has attracted the interest of many researchers and practitioners and is still highly debated as there are many MCDA methods which may yield very different results when they are applied to exactly the same data. This leads to the formulation of a
decision-making paradox The decision-making paradox is a phenomenon related to decision-making and the quest for determining reliable decision-making methods. It was first described by Triantaphyllou , and has been recognized in the related literature as a fundamental p ...
.
Logic Logic is the study of correct reasoning. It includes both formal and informal logic. Formal logic is the science of deductively valid inferences or of logical truths. It is a formal science investigating how conclusions follow from premises ...
al decision-making is an important part of all science-based professions, where specialists apply their
knowledge Knowledge can be defined as awareness of facts or as practical skills, and may also refer to familiarity with objects or situations. Knowledge of facts, also called propositional knowledge, is often defined as true belief that is distinc ...
in a given area to make informed decisions. For example, medical decision-making often involves a
diagnosis Diagnosis is the identification of the nature and cause of a certain phenomenon. Diagnosis is used in many different disciplines, with variations in the use of logic, analytics, and experience, to determine " cause and effect". In systems engin ...
and the selection of appropriate treatment. But
naturalistic decision-making The naturalistic decision making (NDM) framework emerged as a means of studying how people make decisions and perform cognitively complex functions in demanding, real-world situations. These include situations marked by limited time, uncertainty, ...
research shows that in situations with higher time pressure, higher stakes, or increased ambiguities, experts may use
intuitive decision-making Intuition in the context of decision-making is defined as a "non-sequential information-processing mode." It is distinct from insight (a much more protracted process) and can be contrasted with the deliberative style of decision-making. Intuition ca ...
rather than structured approaches. They may follow a
recognition primed decision Recognition-primed decision (RPD) is a model of how people make quick, effective decisions when faced with complex situations. In this model, the decision maker is assumed to generate a possible course of action, compare it to the constraints im ...
that fits their experience, and arrive at a course of action without weighing alternatives. The decision-maker's environment can play a part in the decision-making process. For example, environmental complexity is a factor that influences cognitive function. A complex environment is an environment with a large number of different possible states which come and go over time. Studies done at the
University of Colorado The University of Colorado (CU) is a system of public universities in Colorado. It consists of four institutions: University of Colorado Boulder, University of Colorado Colorado Springs, University of Colorado Denver, and the University of Co ...
have shown that more complex environments correlate with higher cognitive function, which means that a decision can be influenced by the location. One experiment measured complexity in a room by the number of small objects and appliances present; a simple room had less of those things. Cognitive function was greatly affected by the higher measure of environmental complexity, making it easier to think about the situation and make a better decision.


Problem solving vs. decision making

It is important to differentiate between
problem solving Problem solving is the process of achieving a goal by overcoming obstacles, a frequent part of most activities. Problems in need of solutions range from simple personal tasks (e.g. how to turn on an appliance) to complex issues in business an ...
, or problem analysis, and decision-making. Problem solving is the process of investigating the given information and finding all possible solutions through invention or discovery. Traditionally, it is argued that problem solving is a step towards decision making, so that the information gathered in that process may be used towards decision-making. ; Characteristics of problem solving: * Problems are merely deviations from performance standards. * Problems must be precisely identified and described * Problems are caused by a change from a distinctive feature * Something can always be used to distinguish between what has and hasn't been affected by a cause * Causes of problems can be deduced from relevant changes found in analyzing the problem * Most likely cause of a problem is the one that exactly explains all the facts, while having the fewest (or weakest) assumptions (
Occam's razor Occam's razor, Ockham's razor, or Ocham's razor ( la, novacula Occami), also known as the principle of parsimony or the law of parsimony ( la, lex parsimoniae), is the problem-solving principle that "entities should not be multiplied beyond neces ...
). ; Characteristics of decision-making: * Objectives must first be established * Objectives must be classified and placed in order of importance * Alternative actions must be developed * The alternatives must be evaluated against all the objectives * The alternative that is able to achieve all the objectives is the tentative decision * The tentative decision is evaluated for more possible consequences * The decisive actions are taken, and additional actions are taken to prevent any adverse consequences from becoming problems and starting both systems (problem analysis and decision-making) all over again * There are steps that are generally followed that result in a decision model that can be used to determine an optimal production plan * In a situation featuring conflict,
role-playing Role-playing or roleplaying is the changing of one's behaviour to assume a role, either unconsciously to fill a social role, or consciously to act out an adopted role. While the ''Oxford English Dictionary'' offers a definition of role-playing a ...
may be helpful for predicting decisions to be made by involved parties


Analysis paralysis

When a group or individual is unable to make it through the
problem-solving Problem solving is the process of achieving a goal by overcoming obstacles, a frequent part of most activities. Problems in need of solutions range from simple personal tasks (e.g. how to turn on an appliance) to complex issues in business an ...
step on the way to making a decision, they could be experiencing analysis paralysis.
Analysis paralysis Analysis paralysis (or paralysis by analysis) describes an individual or group process where overanalyzing or overthinking a situation can cause forward motion or decision-making to become "paralyzed", meaning that no solution or course of acti ...
is the state that a person enters where they are unable to make a decision, in effect paralyzing the outcome. Some of the main causes for analysis paralysis is the overwhelming flood of incoming data or the tendency to overanalyze the situation at hand. There are said to be three different types of analysis paralysis. * The first is analysis process paralysis. This type of paralysis is often spoken of as a cyclical process. One is unable to make a decision because they get stuck going over the information again and again for fear of making the wrong decision. * The second is decision precision paralysis. This paralysis is cyclical, just like the first one, but instead of going over the same information, the decision-maker will find new questions and information from their analysis and that will lead them to explore into further possibilities rather than making a decision. * The third is risk uncertainty paralysis. This paralysis occurs when the decision-maker wants to eliminate any uncertainty but the examination of provided information is unable to get rid of all uncertainty.


Extinction by instinct

On the opposite side of analysis paralysis is the phenomenon called extinction by instinct. Extinction by instinct is the state that a person is in when they make careless decisions without detailed planning or thorough systematic processes. Extinction by instinct can possibly be fixed by implementing a structural system, like checks and balances into a group or one's life. Analysis paralysis is the exact opposite where a group's schedule could be saturated by too much of a structural checks and balance system. Extinction by instinct in a group setting Groupthink is another occurrence that falls under the idea of extinction by instinct. Groupthink is when members in a group become more involved in the “value of the group (and their being part of it) higher than anything else”; thus, creating a habit of making decisions quickly and unanimously. In other words, a group stuck in groupthink is participating in the phenomenon of extinction by instinct.


Information overload

Information overload is "a gap between the volume of information and the tools we have to assimilate" it. Information used in decision-making is to reduce or eliminate the uncertainty. Excessive information affects problem processing and tasking, which affects decision-making. Psychologist George Armitage Miller suggests that humans’ decision making becomes inhibited because human brains can only hold a limited amount of information. Crystal C. Hall and colleagues described an "illusion of knowledge", which means that as individuals encounter too much knowledge, it can interfere with their ability to make rational decisions. Other names for information overload are information anxiety, information explosion, infobesity, and infoxication.


Decision fatigue

Decision fatigue In decision making and psychology, decision fatigue refers to the deteriorating quality of decisions made by an individual after a long session of decision making.. It is now understood as one of the causes of irrational trade-offs in decision m ...
is when a sizable amount of decision-making leads to a decline in decision-making skills. People who make decisions in an extended period of time begin to lose
mental energy Mental energy may be understood as the ability or willingness to engage in cognitive work. It is distinct from physical energy, and has mood, cognition, and motivation domains. Concepts closely related to mental energy include vigor and fatigu ...
needed to analyze all possible solutions. It is speculated that decision fatigue only happens to those who believe willpower has a limited capacity. Impulsive decision-making and decision avoidance are two possible paths that extend from decision fatigue. Impulse decisions are made more often when a person is tired of analysis situations or solutions; the solution they make is to act and not think. Decision avoidance is when a person evades the situation entirely by not ever making a decision. Decision avoidance is different from analysis paralysis because this sensation is about avoiding the situation entirely, while analysis paralysis is continually looking at the decisions to be made but still unable to make a choice.


Post-decision analysis

Evaluation and analysis of past decisions is complementary to decision-making. See also
mental accounting Mental accounting (or psychological accounting) attempts to describe the process whereby people code, categorize and evaluate economic outcomes. The concept was first named by Richard Thaler. Mental accounting deals with the budgeting and categor ...
and
Postmortem documentation A project post-mortem is a process used to identify the causes of a project failure (or significant business-impairing downtime), and how to prevent them in the future. This is different from a Retrospective, in which both positive and negative th ...
.


Neuroscience

Decision-making is a region of intense study in the fields of systems neuroscience, and
cognitive neuroscience Cognitive neuroscience is the scientific field that is concerned with the study of the biological processes and aspects that underlie cognition, with a specific focus on the neural connections in the brain which are involved in mental proces ...
. Several brain structures, including the
anterior cingulate cortex In the human brain, the anterior cingulate cortex (ACC) is the frontal part of the cingulate cortex that resembles a "collar" surrounding the frontal part of the corpus callosum. It consists of Brodmann areas 24, 32, and 33. It is involved ...
(ACC),
orbitofrontal cortex The orbitofrontal cortex (OFC) is a prefrontal cortex region in the frontal lobes of the brain which is involved in the cognitive process of decision-making. In non-human primates it consists of the association cortex areas Brodmann area 11, 12 ...
, and the overlapping
ventromedial prefrontal cortex The ventromedial prefrontal cortex (vmPFC) is a part of the prefrontal cortex in the mammalian brain. The ventral medial prefrontal is located in the frontal lobe at the bottom of the cerebral hemispheres and is implicated in the processing of r ...
are believed to be involved in decision-making processes. A
neuroimaging Neuroimaging is the use of quantitative (computational) techniques to study the structure and function of the central nervous system, developed as an objective way of scientifically studying the healthy human brain in a non-invasive manner. Incre ...
study found distinctive patterns of neural activation in these regions depending on whether decisions were made on the basis of perceived personal volition or following directions from someone else. Patients with damage to the
ventromedial prefrontal cortex The ventromedial prefrontal cortex (vmPFC) is a part of the prefrontal cortex in the mammalian brain. The ventral medial prefrontal is located in the frontal lobe at the bottom of the cerebral hemispheres and is implicated in the processing of r ...
have difficulty making advantageous decisions. A common laboratory paradigm for studying neural decision-making is the
two-alternative forced choice Two-alternative forced choice (2AFC) is a method for measuring the sensitivity of a person, child or infant, or animal to some particular sensory input, stimulus, through that observer's pattern of choices and response times to two versions of the s ...
task (2AFC), in which a subject has to choose between two alternatives within a certain time. A study of a
two-alternative forced choice Two-alternative forced choice (2AFC) is a method for measuring the sensitivity of a person, child or infant, or animal to some particular sensory input, stimulus, through that observer's pattern of choices and response times to two versions of the s ...
task involving
rhesus monkey The rhesus macaque (''Macaca mulatta''), colloquially rhesus monkey, is a species of Old World monkey. There are between six and nine recognised subspecies that are split between two groups, the Chinese-derived and the Indian-derived. Generally b ...
s found that neurons in the
parietal cortex The parietal lobe is one of the four major lobes of the cerebral cortex in the brain of mammals. The parietal lobe is positioned above the temporal lobe and behind the frontal lobe and central sulcus. The parietal lobe integrates sensory informa ...
not only represent the formation of a decision but also signal the degree of certainty (or "confidence") associated with the decision. A 2012 study found that rats and humans can optimally accumulate incoming sensory evidence, to make statistically optimal decisions. Another study found that lesions to the ACC in the
macaque The macaques () constitute a genus (''Macaca'') of gregarious Old World monkeys of the subfamily Cercopithecinae. The 23 species of macaques inhabit ranges throughout Asia, North Africa, and (in one instance) Gibraltar. Macaques are principally ...
resulted in impaired decision-making in the long run of reinforcement guided tasks suggesting that the ACC may be involved in evaluating past reinforcement information and guiding future action. It has recently been argued that the development of formal frameworks will allow neuroscientists to study richer and more naturalistic paradigms than simple 2AFC decision tasks; in particular, such decisions may involve
planning Planning is the process of thinking regarding the activities required to achieve a desired goal. Planning is based on foresight, the fundamental capacity for mental time travel. The evolution of forethought, the capacity to think ahead, is consi ...
and information search across temporally extended environments.


Emotions

Emotion Emotions are mental states brought on by neurophysiological changes, variously associated with thoughts, feelings, behavioral responses, and a degree of pleasure or displeasure. There is currently no scientific consensus on a definition. ...
appears able to aid the decision-making process. Decision-making often occurs in the face of
uncertainty Uncertainty refers to epistemic situations involving imperfect or unknown information. It applies to predictions of future events, to physical measurements that are already made, or to the unknown. Uncertainty arises in partially observable or ...
about whether one's choices will lead to benefit or harm (see also
Risk In simple terms, risk is the possibility of something bad happening. Risk involves uncertainty about the effects/implications of an activity with respect to something that humans value (such as health, well-being, wealth, property or the environme ...
). The
somatic marker hypothesis The somatic marker hypothesis, formulated by Antonio Damasio and associated researchers, proposes that emotional processes guide (or bias) behavior, particularly decision-making. ''Descartes' Error'' "Somatic markers" are feelings in the body th ...
is a
neurobiological Neuroscience is the scientific study of the nervous system (the brain, spinal cord, and peripheral nervous system), its functions and disorders. It is a multidisciplinary science that combines physiology, anatomy, molecular biology, developme ...
theory of how decisions are made in the face of uncertain outcomes. This theory holds that such decisions are aided by emotions, in the form of bodily states, that are elicited during the deliberation of future consequences and that mark different options for behavior as being advantageous or disadvantageous. This process involves an interplay between neural systems that elicit emotional/bodily states and neural systems that map these emotional/bodily states. A recent lesion mapping study of 152 patients with focal brain lesions conducted by
Aron K. Barbey Aron Keith Barbey (born January 6, 1977) is an American cognitive neuroscientist, who investigates the neural architecture of human intelligence and brain plasticity. Barbey is the Emanuel Donchin Professorial Scholar of Psychology and a Profes ...
and colleagues provided evidence to help discover the neural mechanisms of
emotional intelligence Emotional intelligence (EI) is most often defined as the ability to perceive, use, understand, manage, and handle emotions. People with high emotional intelligence can emotion recognition, recognize their own emotions and those of others, use em ...
.


Decision-making techniques

Decision-making techniques can be separated into two broad categories:
group decision-making Group decision-making (also known as collaborative decision-making or collective decision-making) is a situation faced when individuals collectively make a choice from the alternatives before them. The decision is then no longer attributable to an ...
techniques and individual decision-making techniques. Individual decision-making techniques can also often be applied by a group.


Group

*
Consensus decision-making Consensus decision-making or consensus process (often abbreviated to ''consensus'') are group decision-making processes in which participants develop and decide on proposals with the aim, or requirement, of acceptance by all. The focus on es ...
tries to avoid "winners" and "losers". Consensus requires that a majority approve a given course of action, but that the minority agree to go along with the course of action. In other words, if the minority opposes the course of action, consensus requires that the course of action be modified to remove objectionable features. * Voting-based methods: **
Majority A majority, also called a simple majority or absolute majority to distinguish it from #Related terms, related terms, is more than half of the total.Dictionary definitions of ''majority'' aMerriam-WebsterCondorcet method A Condorcet method (; ) is an election method that elects the candidate who wins a majority of the vote in every head-to-head election against each of the other candidates, that is, a candidate preferred by more voters than any others, whenever ...
. ** Plurality, where the largest faction in a group decides, even if it falls short of a majority. ** Score voting (or range voting) lets each member score one or more of the available options, specifying both ''preference'' and ''intensity of preference'' information. The option with the highest total or average is chosen. This method has experimentally been shown to produce the lowest
Bayesian regret In stochastic game theory, Bayesian regret is the expected difference ("regret") between the utility of a Bayesian strategy and that of the optimal strategy (the one with the highest expected payoff). The term ''Bayesian'' refers to Thomas Baye ...
among common voting methods, even when voters are strategic. It addresses issues of
voting paradox The Condorcet paradox (also known as the voting paradox or the paradox of voting) in social choice theory is a situation noted by the Marquis de Condorcet in the late 18th century, in which collective preferences can be cyclic, even if the prefer ...
and
majority rule Majority rule is a principle that means the decision-making power belongs to the group that has the most members. In politics, majority rule requires the deciding vote to have majority, that is, more than half the votes. It is the binary deci ...
. See also
approval voting Approval voting is an electoral system in which voters can select many candidates instead of selecting only one candidate. Description Approval voting ballots show a list of the options of candidates running. Approval voting lets each voter i ...
. **
Quadratic voting Quadratic voting is a collective decision-making procedure which involves individuals allocating votes to express the ''degree'' of their preferences, rather than just the ''direction'' of their preferences. By doing so, quadratic voting seeks ...
allows participants to cast their ''preference'' and ''intensity of preference'' for each decision (as opposed to a simple ''for'' or ''against'' decision). As in score voting, it addresses issues of voting paradox and majority rule. *
Delphi method } The Delphi method or Delphi technique ( ; also known as Estimate-Talk-Estimate or ETE) is a structured communication technique or method, originally developed as a systematic, interactive forecasting method which relies on a panel of experts. The ...
is a structured communication technique for groups, originally developed for collaborative forecasting but has also been used for
policy making Policy is a deliberate system of guidelines to guide decisions and achieve rational outcomes. A policy is a statement of intent and is implemented as a procedure or protocol. Policies are generally adopted by a governance body within an orga ...
. *
Dotmocracy Dot-voting (also known as dotmocracy or voting with dots) is an established facilitation method used to describe voting with dot stickers or marks with a marker pen. In dot-voting participants vote on their chosen options using a limited number ...
is a facilitation method that relies on the use of special forms called Dotmocracy. They are sheets that allows large groups to collectively brainstorm and recognize agreements on an unlimited number of ideas they have each wrote. *
Participative decision-making Participative decision-making (PDM) is the extent to which employers allow or encourage employees to share or participate in organizational decision-making. According to Cotton et al., the format of PDM could be formal or informal. In addition, t ...
occurs when an authority opens up the decision-making process to a group of people for a collaborative effort. *
Decision engineering Decision intelligence is an engineering discipline that augments data science with theory from social science, decision theory, and managerial science. Its application provides a framework for best practices in organizational decision-making an ...
uses a visual map of the decision-making process based on
system dynamics System dynamics (SD) is an approach to understanding the nonlinear behaviour of complex systems over time using stocks, flows, internal feedback loops, table functions and time delays. Overview System dynamics is a methodology and mathematical ...
and can be automated through a decision modeling tool, integrating
big data Though used sometimes loosely partly because of a lack of formal definition, the interpretation that seems to best describe Big data is the one associated with large body of information that we could not comprehend when used only in smaller am ...
,
machine learning Machine learning (ML) is a field of inquiry devoted to understanding and building methods that 'learn', that is, methods that leverage data to improve performance on some set of tasks. It is seen as a part of artificial intelligence. Machine ...
, and expert knowledge as appropriate.


Individual

*
Decisional balance sheet A decisional balance sheet or decision balance sheet is a tabular method for representing the pros and cons of different choices and for helping someone decide what to do in a certain circumstance. It is often used in working with ambivalence in p ...
: listing the advantages and disadvantages (benefits and costs, pros and cons) of each option, as suggested by
Plato Plato ( ; grc-gre, Πλάτων ; 428/427 or 424/423 – 348/347 BC) was a Greek philosopher born in Athens during the Classical period in Ancient Greece. He founded the Platonist school of thought and the Academy, the first institution ...
's ''
Protagoras Protagoras (; el, Πρωταγόρας; )Guthrie, p. 262–263. was a pre-Socratic Greek philosopher and rhetorical theorist. He is numbered as one of the sophists by Plato. In his dialogue '' Protagoras'', Plato credits him with inventing the r ...
'' and by
Benjamin Franklin Benjamin Franklin ( April 17, 1790) was an American polymath who was active as a writer, scientist, inventor, statesman, diplomat, printer, publisher, and political philosopher. Encyclopædia Britannica, Wood, 2021 Among the leading inte ...
. * Expected-value optimization: choosing the alternative with the highest probability-weighted
utility As a topic of economics, utility is used to model worth or value. Its usage has evolved significantly over time. The term was introduced initially as a measure of pleasure or happiness as part of the theory of utilitarianism by moral philosopher ...
, possibly with some consideration for
risk aversion In economics and finance, risk aversion is the tendency of people to prefer outcomes with low uncertainty to those outcomes with high uncertainty, even if the average outcome of the latter is equal to or higher in monetary value than the more ce ...
. This may involve considering the
opportunity cost In microeconomic theory, the opportunity cost of a particular activity is the value or benefit given up by engaging in that activity, relative to engaging in an alternative activity. More effective it means if you chose one activity (for example ...
of different alternatives. See also
Decision analysis Decision analysis (DA) is the discipline comprising the philosophy, methodology, and professional practice necessary to address important decisions in a formal manner. Decision analysis includes many procedures, methods, and tools for identifying, ...
and
Decision theory Decision theory (or the theory of choice; not to be confused with choice theory) is a branch of applied probability theory concerned with the theory of making decisions based on assigning probabilities to various factors and assigning numerical ...
. *
Satisficing Satisficing is a decision-making strategy or cognitive heuristic that entails searching through the available alternatives until an acceptability threshold is met. The term ''satisficing'', a portmanteau of ''satisfy'' and ''suffice'', was introduc ...
: examining alternatives only until the first acceptable one is found. The opposite is maximizing or
optimizing Mathematical optimization (alternatively spelled ''optimisation'') or mathematical programming is the selection of a best element, with regard to some criterion, from some set of available alternatives. It is generally divided into two subfi ...
, in which many or all alternatives are examined in order to find the best option. * Acquiesce to a person in authority or an "expert"; "
just following orders Superior orders, also known as the Nuremberg defense or just following orders, is a plea in a court of law that a person, whether a member of the military, law enforcement, a firefighting force, or the civilian population, should not be considered ...
". * Anti-authoritarianism: taking the most opposite action compared to the advice of mistrusted authorities. *
Flipism Flipism, sometimes spelled "flippism", is a pseudophilosophy under which decisions are made by flipping a coin. It originally appeared in the ''Donald Duck'' Disney comic "Flip Decision" by Carl Barks, published in 1953. Barks called a practitio ...
e.g. flipping a coin, cutting a deck of playing cards, and other random or coincidence methodsor prayer,
tarot The tarot (, first known as '' trionfi'' and later as ''tarocchi'' or ''tarocks'') is a pack of playing cards, used from at least the mid-15th century in various parts of Europe to play card games such as Tarocchini. From their Italian roots, ...
cards, astrology,
augurs An augur was a priest and official in the classical Roman world. His main role was the practice of augury, the interpretation of the will of the gods by studying the flight of birds. Determinations were based upon whether they were flying in ...
,
revelation In religion and theology, revelation is the revealing or disclosing of some form of truth or knowledge through communication with a deity or other supernatural entity or entities. Background Inspiration – such as that bestowed by God on the ...
, or other forms of
divination Divination (from Latin ''divinare'', 'to foresee, to foretell, to predict, to prophesy') is the attempt to gain insight into a question or situation by way of an occultic, standardized process or ritual. Used in various forms throughout histor ...
, superstition or
pseudoscience Pseudoscience consists of statements, beliefs, or practices that claim to be both scientific and factual but are incompatible with the scientific method. Pseudoscience is often characterized by contradictory, exaggerated or falsifiability, unfa ...
. *
Automated decision support Automated Decision Support, or ADS, systems are rule-based systems that are able to automatically provide solutions to repetitive management problems.Turban, Leidner, McLean and Wetherbe, 2007 ADSs are very closely related to business informatics ...
: setting up criteria for automated decisions. *
Decision support system A decision support system (DSS) is an information system that supports business or organizational decision-making activities. DSSs serve the management, operations and planning levels of an organization (usually mid and higher management) and h ...
s: using
decision-making software Decision-making software (DM software) is software for computer applications that help individuals and organisations make choices and take decisions, typically by ranking, prioritizing or choosing from a number of options. An early example of DM so ...
when faced with highly complex decisions or when considering many stakeholders, categories, or other factors that affect decisions.


Steps

A variety of researchers have formulated similar prescriptive steps aimed at improving decision-making.


GOFER

In the 1980s, psychologist Leon Mann and colleagues developed a decision-making process called GOFER, which they taught to adolescents, as summarized in the book ''Teaching Decision Making To Adolescents''. The process was based on extensive earlier research conducted with psychologist
Irving Janis Irving Lester Janis (May 26, 1918 – November 15, 1990) was an American research psychologist at Yale University and a professor emeritus at the University of California, Berkeley most famous for his theory of "groupthink" which described the ...
. GOFER is an
acronym An acronym is a word or name formed from the initial components of a longer name or phrase. Acronyms are usually formed from the initial letters of words, as in ''NATO'' (''North Atlantic Treaty Organization''), but sometimes use syllables, as ...
for five decision-making steps: # Goals clarification: Survey values and objectives. # Options generation: Consider a wide range of alternative actions. # Facts-finding: Search for information. # Consideration of Effects: Weigh the positive and negative consequences of the options. # Review and implementation: Plan how to review the options and implement them.


Other

In 2007, Pam Brown of
Singleton Hospital Singleton Hospital ( cy, Ysbyty Singleton) is a general hospital in Sketty Lane, Swansea, Wales. It is managed by Swansea Bay University Health Board. History The first stage of the hospital, which included outpatients' facilities, was completed ...
in
Swansea Swansea (; cy, Abertawe ) is a coastal city and the second-largest city of Wales. It forms a principal area, officially known as the City and County of Swansea ( cy, links=no, Dinas a Sir Abertawe). The city is the twenty-fifth largest in ...
,
Wales Wales ( cy, Cymru ) is a Countries of the United Kingdom, country that is part of the United Kingdom. It is bordered by England to the Wales–England border, east, the Irish Sea to the north and west, the Celtic Sea to the south west and the ...
, divided the decision-making process into seven steps: # Outline the goal and outcome. # Gather data. # Develop alternatives (i.e., brainstorming). # List pros and cons of each alternative. # Make the decision. # Immediately take action to implement it. # Learn from and reflect on the decision. In 2008, Kristina Guo published the DECIDE model of decision-making, which has six parts: # Define the problem # Establish or Enumerate all the criteria (constraints) # Consider or Collect all the alternatives # Identify the best alternative # Develop and implement a plan of action # Evaluate and
monitor Monitor or monitor may refer to: Places * Monitor, Alberta * Monitor, Indiana, town in the United States * Monitor, Kentucky * Monitor, Oregon, unincorporated community in the United States * Monitor, Washington * Monitor, Logan County, West ...
the solution and examine
feedback Feedback occurs when outputs of a system are routed back as inputs as part of a chain of cause-and-effect that forms a circuit or loop. The system can then be said to ''feed back'' into itself. The notion of cause-and-effect has to be handled ...
when necessary In 2009, professor John Pijanowski described how the Arkansas Program, an ethics curriculum at the
University of Arkansas The University of Arkansas (U of A, UArk, or UA) is a public land-grant research university in Fayetteville, Arkansas. It is the flagship campus of the University of Arkansas System and the largest university in the state. Founded as Arkansas ...
, used eight stages of
moral A moral (from Latin ''morālis'') is a message that is conveyed or a lesson to be learned from a story or event. The moral may be left to the hearer, reader, or viewer to determine for themselves, or may be explicitly encapsulated in a maxim. A ...
decision-making based on the work of
James Rest James Rest was an American psychologist specializing in moral psychology and development. Together with his Minnesota Group of colleagues, including Darcia Narvaez, Muriel Bebeau, and Stephen Thoma, Rest extended Kohlberg's approach to researching ...
: # Establishing community: Create and nurture the relationships, norms, and procedures that will influence how problems are understood and communicated. This stage takes place prior to and during a moral dilemma. # Perception: Recognize that a problem exists. # Interpretation: Identify competing explanations for the problem, and evaluate the drivers behind those interpretations. # Judgment: Sift through various possible actions or responses and determine which is more justifiable. # Motivation: Examine the competing commitments which may distract from a more moral course of action and then prioritize and commit to moral values over other personal, institutional or social values. # Action: Follow through with action that supports the more justified decision. # Reflection in action. # Reflection on action.


Group stages

There are four stages or phases that should be involved in all group decision-making: * Orientation. Members meet for the first time and start to get to know each other. * Conflict. Once group members become familiar with each other, disputes, little fights and arguments occur. Group members eventually work it out. * Emergence. The group begins to clear up vague opinions by talking about them. *
Reinforcement In behavioral psychology, reinforcement is a consequence applied that will strengthen an organism's future behavior whenever that behavior is preceded by a specific antecedent stimulus. This strengthening effect may be measured as a higher freq ...
. Members finally make a decision and provide justification for it. It is said that establishing critical norms in a group improves the quality of decisions, while the majority of opinions (called consensus norms) do not. Conflicts in socialization are divided in to functional and dysfunctional types. Functional conflicts are mostly the questioning the managers assumptions in their decision making and dysfunctional conflicts are like personal attacks and every action which decrease team effectiveness. Functional conflicts are the better ones to gain higher quality decision making caused by the increased team knowledge and shared understanding.


Rational and irrational

In
economics Economics () is the social science that studies the Production (economics), production, distribution (economics), distribution, and Consumption (economics), consumption of goods and services. Economics focuses on the behaviour and intera ...
, it is thought that if humans are rational and free to make their own decisions, then they would behave according to
rational choice theory Rational choice theory refers to a set of guidelines that help understand economic and social behaviour. The theory originated in the eighteenth century and can be traced back to political economist and philosopher, Adam Smith. The theory postula ...
. Rational choice theory says that a person consistently makes choices that lead to the best situation for themselves, taking into account all available considerations including costs and benefits; the rationality of these considerations is from the point of view of the person themselves, so a decision is not irrational just because someone else finds it questionable. In reality, however, there are some factors that affect decision-making abilities and cause people to make irrational decisionsfor example, to make contradictory choices when faced with the same problem framed in two different ways (see also
Allais paradox The Allais paradox is a choice problem designed by to show an inconsistency of actual observed choices with the predictions of expected utility theory. Statement of the problem The Allais paradox arises when comparing participants' choices in two ...
). Rational decision making is a multi-step process for making choices between alternatives. The process of rational decision making favors logic, objectivity, and analysis over subjectivity and insight. Irrational decision is more counter to logic. The decisions are made in haste and outcomes are not considered. One of the most prominent theories of decision making is
subjective expected utility In decision theory, subjective expected utility is the attractiveness of an economic opportunity as perceived by a decision-maker in the presence of risk. Characterizing the behavior of decision-makers as using subjective expected utility was prom ...
(SEU) theory, which describes the rational behavior of the decision maker. The decision maker assesses different alternatives by their utilities and the subjective probability of occurrence. Rational decision-making is often grounded on experience and theories that are able to put this approach on solid mathematical grounds so that subjectivity is reduced to a minimum, see e.g.
scenario optimization The scenario approach or scenario optimization approach is a technique for obtaining solutions to robust optimization and chance-constrained optimization problems based on a sample of the constraints. It also relates to inductive reasoning in mod ...
. Rational decision is generally seen as the best or most likely decision to achieve the set goals or outcome.


Children, adolescents, and adults


Children

It has been found that, unlike adults, children are less likely to have research strategy behaviors. One such behavior is adaptive decision-making, which is described as funneling and then analyzing the more promising information provided if the number of options to choose from increases. Adaptive decision-making behavior is somewhat present for children, ages 11–12 and older, but decreases in presence the younger they are. The reason children aren't as fluid in their decision making is because they lack the ability to weigh the cost and effort needed to gather information in the decision-making process. Some possibilities that explain this inability are knowledge deficits and lack of utilization skills. Children lack the metacognitive knowledge necessary to know when to use any strategies they do possess to change their approach to decision-making. When it comes to the idea of fairness in decision making, children and adults differ much less. Children are able to understand the concept of fairness in decision making from an early age. Toddlers and infants, ranging from 9–21 months, understand basic principles of equality. The main difference found is that more complex principles of fairness in decision making such as contextual and intentional information don't come until children get older.


Adolescents

During their adolescent years, teens are known for their high-risk behaviors and rash decisions. Research has shown that there are differences in cognitive processes between adolescents and adults during decision-making. Researchers have concluded that differences in decision-making are not due to a lack of logic or reasoning, but more due to the immaturity of
psychosocial The psychosocial approach looks at individuals in the context of the combined influence that psychological factors and the surrounding social environment have on their physical and mental wellness and their ability to function. This approach is ...
capacities that influence decision-making. Examples of their undeveloped capacities which influence decision-making would be impulse control, emotion regulation,
delayed gratification Delayed gratification, or deferred gratification, is the resistance to the temptation of an immediate pleasure in the hope of obtaining a valuable and long-lasting reward in the long-term. In other words, delayed gratification describes the pro ...
and resistance to
peer pressure Peer pressure is the direct or indirect influence on peers, i.e., members of social groups with similar interests, experiences, or social statuses. Members of a peer group are more likely to influence a person's beliefs, values, and behavior. A g ...
. In the past, researchers have thought that adolescent behavior was simply due to incompetency regarding decision-making. Currently, researchers have concluded that adults and adolescents are both competent decision-makers, not just adults. However, adolescents' competent decision-making skills decrease when psychosocial capacities become present. Research has shown that risk-taking behaviors in adolescents may be the product of interactions between the socioemotional brain network and its cognitive-control network. The socioemotional part of the brain processes social and emotional stimuli and has been shown to be important in reward processing. The cognitive-control network assists in planning and self-regulation. Both of these sections of the brain change over the course of
puberty Puberty is the process of physical changes through which a child's body matures into an adult body capable of sexual reproduction. It is initiated by hormonal signals from the brain to the gonads: the ovaries in a girl, the testes in a boy. ...
. However, the socioemotional network changes quickly and abruptly, while the cognitive-control network changes more gradually. Because of this difference in change, the cognitive-control network, which usually regulates the socioemotional network, struggles to control the socioemotional network when psychosocial capacities are present. When adolescents are exposed to social and emotional stimuli, their socioemotional network is activated as well as areas of the brain involved in reward processing. Because teens often gain a sense of reward from risk-taking behaviors, their repetition becomes ever more probable due to the reward experienced. In this, the process mirrors
addiction Addiction is a neuropsychological disorder characterized by a persistent and intense urge to engage in certain behaviors, one of which is the usage of a drug, despite substantial harm and other negative consequences. Repetitive drug use o ...
. Teens can become addicted to risky behavior because they are in a high state of arousal and are rewarded for it not only by their own internal functions but also by their peers around them. A recent study suggests that adolescents have difficulties adequately adjusting beliefs in response to bad news (such as reading that smoking poses a greater risk to health than they thought), but do not differ from adults in their ability to alter beliefs in response to good news. This creates biased beliefs, which may lead to greater risk taking.


Adults

Adults are generally better able to control their risk-taking because their cognitive-control system has matured enough to the point where it can control the socioemotional network, even in the context of high arousal or when psychosocial capacities are present. Also, adults are less likely to find themselves in situations that push them to do risky things. For example, teens are more likely to be around peers who peer pressure them into doing things, while adults are not as exposed to this sort of social setting.


Cognitive and personal biases

Bias Bias is a disproportionate weight ''in favor of'' or ''against'' an idea or thing, usually in a way that is closed-minded, prejudicial, or unfair. Biases can be innate or learned. People may develop biases for or against an individual, a group, ...
es usually affect decision-making processes. They appear more when decision task has time pressure, is done under high stress and/or task is highly complex. Here is a list of commonly debated biases in judgment and decision-making: * Selective search for
evidence Evidence for a proposition is what supports this proposition. It is usually understood as an indication that the supported proposition is true. What role evidence plays and how it is conceived varies from field to field. In epistemology, evidenc ...
(also known as
confirmation bias Confirmation bias is the tendency to search for, interpret, favor, and recall information in a way that confirms or supports one's prior beliefs or values. People display this bias when they select information that supports their views, ignoring ...
): People tend to be willing to gather facts that support certain conclusions but disregard other facts that support different conclusions. Individuals who are highly defensive in this manner show significantly greater left prefrontal cortex activity as measured by
EEG Electroencephalography (EEG) is a method to record an electrogram of the spontaneous electrical activity of the brain. The biosignals detected by EEG have been shown to represent the postsynaptic potentials of pyramidal neurons in the neocortex ...
than do less defensive individuals. * Premature termination of search for evidence: People tend to accept the first alternative that looks like it might work. *
Cognitive inertia Cognitive inertia is the tendency for a particular orientation in how an individual thinks about an issue, belief or strategy to resist change. In clinical and neuroscientific literature it is often defined as a lack of motivation to generate dist ...
is the unwillingness to change existing thought patterns in the face of new circumstances. * Selective perception: People actively screen out information that they do not think is important (see also
Prejudice Prejudice can be an affective feeling towards a person based on their perceived group membership. The word is often used to refer to a preconceived (usually unfavourable) evaluation or classification of another person based on that person's per ...
). In one demonstration of this effect, discounting of arguments with which one disagrees (by judging them as untrue or irrelevant) was decreased by selective activation of right prefrontal cortex. *
Wishful thinking Wishful thinking is the formation of beliefs based on what might be pleasing to imagine, rather than on evidence, rationality, or reality. It is a product of resolving conflicts between belief and desire. Methodologies to examine wishful think ...
is a tendency to want to see things in a certainusually positivelight, which can distort perception and thinking. *
Choice-supportive bias Choice-supportive bias or post-purchase rationalization is the tendency to retroactively ascribe positive attributes to an option one has selected and/or to demote the forgone options. It is part of cognitive science, and is a distinct cognitive ...
occurs when people distort their memories of chosen and rejected options to make the chosen options seem more attractive. * Recency: People tend to place more attention on more recent information and either ignore or forget more distant information (see
Semantic priming Priming is a phenomenon whereby exposure to one stimulus influences a response to a subsequent stimulus, without conscious guidance or intention. The priming effect refers to the positive or negative effect of a rapidly presented stimulus (priming ...
). The opposite effect in the first set of data or other information is termed ''
primacy effect Serial-position effect is the tendency of a person to recall the first and last items in a series best, and the middle items worst. The term was coined by Hermann Ebbinghaus through studies he performed on himself, and refers to the finding that r ...
''. * Repetition bias is a willingness to believe what one has been told most often and by the greatest number of different sources. *
Anchoring and adjustment The anchoring effect is a cognitive bias whereby an individual's decisions are influenced by a particular reference point or 'anchor'. Both numeric and non-numeric anchoring have been reported in research. In numeric anchoring, once the value of ...
: Decisions are unduly influenced by initial information that shapes our view of subsequent information. *
Groupthink Groupthink is a psychological phenomenon that occurs within a group of people in which the desire for harmony or conformity in the group results in an irrational or dysfunctional decision-making outcome. Cohesiveness, or the desire for cohesiveness ...
is
peer pressure Peer pressure is the direct or indirect influence on peers, i.e., members of social groups with similar interests, experiences, or social statuses. Members of a peer group are more likely to influence a person's beliefs, values, and behavior. A g ...
to conform to the opinions held by the group. * Source credibility bias is a tendency to reject a person's statement on the basis of a bias against the person, organization, or group to which the person belongs. People preferentially accept statements by others that they like (see also
Prejudice Prejudice can be an affective feeling towards a person based on their perceived group membership. The word is often used to refer to a preconceived (usually unfavourable) evaluation or classification of another person based on that person's per ...
). * Incremental decision-making and escalating commitment: People look at a decision as a small step in a process, and this tends to perpetuate a series of similar decisions. This can be contrasted with ''zero-based decision-making'' (see
Slippery slope A slippery slope argument (SSA), in logic, critical thinking, political rhetoric, and caselaw, is an argument in which a party asserts that a relatively small first step leads to a chain of related events culminating in some significant (usuall ...
). * Attribution asymmetry: People tend to attribute their own success to internal factors, including abilities and talents, but explain their failures in terms of external factors such as bad luck. The reverse bias is shown when people explain others' success or failure. * Role fulfillment is a tendency to conform to others' decision-making expectations. * Underestimating
uncertainty Uncertainty refers to epistemic situations involving imperfect or unknown information. It applies to predictions of future events, to physical measurements that are already made, or to the unknown. Uncertainty arises in partially observable or ...
and the
illusion of control The illusion of control is the tendency for people to overestimate their ability to control events. It was named by U.S. psychologist Ellen Langer and is thought to influence gambling behavior and belief in the paranormal. Along with illusory supe ...
: People tend to underestimate future uncertainty because of a tendency to believe they have more control over events than they really do. * Framing bias: This is best avoided by increasing
numeracy Numeracy is the ability to understand, reason with, and to apply simple numerical concepts. The charity National Numeracy states: "Numeracy means understanding how mathematics is used in the real world and being able to apply it to make the bes ...
and presenting data in several formats (for example, using both absolute and relative scales). ** Sunk-cost fallacy is a specific type of framing effect that affects decision-making. It involves an individual making a decision about a current situation based on what they have previously invested in the situation. An example of this would be an individual that is refraining from dropping a class that they are most likely to fail, due to the fact that they feel as though they have done so much work in the course thus far. *
Prospect theory Prospect theory is a theory of behavioral economics and behavioral finance that was developed by Daniel Kahneman and Amos Tversky in 1979. The theory was cited in the decision to award Kahneman the 2002 Nobel Memorial Prize in Economics. Based ...
involves the idea that when faced with a decision-making event, an individual is more likely to take on a risk when evaluating potential losses, and are more likely to avoid risks when evaluating potential gains. This can influence one's decision-making depending if the situation entails a threat, or opportunity. *
Optimism bias Optimism bias (or the optimistic bias) is a cognitive bias that causes someone to believe that they themselves are less likely to experience a negative event. It is also known as unrealistic optimism or comparative optimism. Optimism bias is commo ...
is a tendency to overestimate the likelihood of positive events occurring in the future and underestimate the likelihood of negative life events. Such biased expectations are generated and maintained in the face of counter-evidence through a tendency to discount undesirable information. An optimism bias can alter risk perception and decision-making in many domains, ranging from finance to health. *
Reference class forecasting Reference class forecasting or comparison class forecasting is a method of predicting the future by looking at similar past situations and their outcomes. The theories behind reference class forecasting were developed by Daniel Kahneman and Amos T ...
was developed to eliminate or reduce cognitive biases in decision-making.


Cognitive limitations in groups

In groups, people generate decisions through active and complex processes. One method consists of three steps: initial preferences are expressed by members; the members of the group then gather and share information concerning those preferences; finally, the members combine their views and make a single choice about how to face the problem. Although these steps are relatively ordinary, judgements are often distorted by cognitive and motivational biases, include "sins of commission", "sins of omission", and "sins of imprecision".


Cognitive styles


Optimizing vs. satisficing

Herbert A. Simon Herbert Alexander Simon (June 15, 1916 – February 9, 2001) was an American political scientist, with a Ph.D. in political science, whose work also influenced the fields of computer science, economics, and cognitive psychology. His primary ...
coined the phrase "
bounded rationality Bounded rationality is the idea that rationality is limited when individuals make decisions, and under these limitations, rational individuals will select a decision that is satisfactory rather than optimal. Limitations include the difficulty of ...
" to express the idea that human decision-making is limited by available information, available time and the mind's information-processing ability. Further psychological research has identified individual differences between two cognitive styles: '' maximizers'' try to make an
optimal decision An optimal decision is a decision that leads to at least as good a known or expected outcome as all other available decision options. It is an important concept in decision theory. In order to compare the different decision outcomes, one commonly ...
, whereas ''
satisficer Satisficing is a decision-making strategy or cognitive heuristic that entails searching through the available alternatives until an acceptability threshold is met. The term ''satisficing'', a portmanteau of ''satisfy'' and ''suffice'', was introdu ...
s'' simply try to find a solution that is "good enough". Maximizers tend to take longer making decisions due to the need to maximize performance across all variables and make tradeoffs carefully; they also tend to more often regret their decisions (perhaps because they are more able than satisficers to recognize that a decision turned out to be sub-optimal).


Intuitive vs. rational

The psychologist
Daniel Kahneman Daniel Kahneman (; he, דניאל כהנמן; born March 5, 1934) is an Israeli-American psychologist and economist notable for his work on the psychology of judgment and decision-making, as well as behavioral economics, for which he was award ...
, adopting terms originally proposed by the psychologists
Keith Stanovich Keith E. Stanovich is a Canadian psychologist. He is an Emeritus Professor of Applied Psychology and Human Development at the University of Toronto and former Canada Research Chair of Applied Cognitive Science. His research areas are the psycho ...
and Richard West, has theorized that a person's decision-making is the result of an interplay between two kinds of
cognitive process Cognition refers to "the mental action or process of acquiring knowledge and understanding through thought, experience, and the senses". It encompasses all aspects of intellectual functions and processes such as: perception, attention, thought, ...
es: an automatic intuitive system (called "System 1") and an effortful rational system (called "System 2"). System 1 is a bottom-up, fast, and implicit system of decision-making, while system 2 is a top-down, slow, and explicit system of decision-making. System 1 includes simple
heuristics in judgment and decision-making Heuristics is the process by which humans use mental short cuts to arrive at decisions. Heuristics are simple strategies that humans, animals, organizations, and even machines use to quickly form judgments, make decisions, and find solutions to c ...
such as the
affect heuristic The affect heuristic is a heuristic, a mental shortcut that allows people to make decisions and solve problems quickly and efficiently, in which current emotion—fear, pleasure, surprise, etc.—influences decisions. In other words, it is a typ ...
, the
availability heuristic The availability heuristic, also known as availability bias, is a mental shortcut that relies on immediate examples that come to a given person's mind when evaluating a specific topic, concept, method, or decision. This heuristic, operating on the ...
, the
familiarity heuristic In psychology, a heuristic is an easy-to-compute procedure or ''rule of thumb'' that people use when forming beliefs, judgments or decisions. The familiarity heuristic was developed based on the discovery of the availability heuristic by psychologi ...
, and the
representativeness heuristic The representativeness heuristic is used when making judgments about the probability of an event under uncertainty. It is one of a group of heuristics (simple rules governing judgment or decision-making) proposed by psychologists Amos Tversky and D ...
.


Combinatorial vs. positional

Styles and methods of decision-making were elaborated by
Aron Katsenelinboigen Aron Iosifovich Katsenelinboigen (russian: Арон Иосифович Каценелинбойген; September 2, 1927 – July 30, 2005) was a founder of predispositioning theory, a subject in decision theory and systems theory that mod ...
, the founder of
predispositioning theory Predispositioning theory, in the field of decision theory and systems theory, is a theory focusing on the stages between a complete order and a complete disorder. Predispositioning theory was founded by Aron Katsenelinboigen (1927–2005), a profe ...
. In his analysis on styles and methods, Katsenelinboigen referred to the game of chess, saying that "chess does disclose various methods of operation, notably the creation of predisposition-methods which may be applicable to other, more complex systems." Katsenelinboigen states that apart from the methods (reactive and selective) and sub-methods (randomization, predispositioning, programming), there are two major styles: positional and combinational. Both styles are utilized in the game of chess. The two styles reflect two basic approaches to
uncertainty Uncertainty refers to epistemic situations involving imperfect or unknown information. It applies to predictions of future events, to physical measurements that are already made, or to the unknown. Uncertainty arises in partially observable or ...
: deterministic (combinational style) and indeterministic (positional style). Katsenelinboigen's definition of the two styles are the following. The combinational style is characterized by: * a very narrow, clearly defined, primarily material goal; and * a program that links the initial position with the outcome. In defining the combinational style in chess, Katsenelinboigen wrote: "The combinational style features a clearly formulated limited objective, namely the capture of material (the main constituent element of a chess position). The objective is implemented via a well-defined, and in some cases, unique sequence of moves aimed at reaching the set goal. As a rule, this sequence leaves no options for the opponent. Finding a combinational objective allows the player to focus all his energies on efficient execution, that is, the player's analysis may be limited to the pieces directly partaking in the combination. This approach is the crux of the combination and the combinational style of play. The positional style is distinguished by: * a positional goal; and * a formation of semi-complete linkages between the initial step and final outcome. "Unlike the combinational player, the positional player is occupied, first and foremost, with the elaboration of the position that will allow him to develop in the unknown future. In playing the positional style, the player must evaluate relational and material parameters as independent variables. ... The positional style gives the player the opportunity to develop a position until it becomes pregnant with a combination. However, the combination is not the final goal of the positional playerit helps him to achieve the desirable, keeping in mind a predisposition for the future development. The
pyrrhic victory A Pyrrhic victory ( ) is a victory that inflicts such a devastating toll on the victor that it is tantamount to defeat. Such a victory negates any true sense of achievement or damages long-term progress. The phrase originates from a quote from P ...
is the best example of one's inability to think positionally." The positional style serves to: * create a predisposition to the future development of the position; * induce the environment in a certain way; * absorb an unexpected outcome in one's favor; and * avoid the negative aspects of unexpected outcomes.


Influence of Myers–Briggs type

According to
Isabel Briggs Myers Isabel Briggs Myers (born Isabel Briggs; October 18, 1897 – May 5, 1980) was an American writer and co-creator with her mother, Katharine Cook Briggs, of a personality inventory known as the Myers–Briggs Type Indicator (MBTI) and based on ...
, a person's decision-making process depends to a significant degree on their cognitive style. Myers developed a set of four bi-polar dimensions, called the
Myers–Briggs Type Indicator In Personality type, personality typology, the Myers–Briggs Type Indicator (MBTI) is an introspection, introspective self-report study, self-report questionnaire indicating differing Psychology, psychological preferences in how people perceiv ...
(MBTI). The terminal points on these dimensions are: ''thinking'' and ''feeling''; ''extroversion'' and ''introversion''; ''judgment'' and ''perception''; and ''sensing'' and ''intuition''. She claimed that a person's decision-making style correlates well with how they score on these four dimensions. For example, someone who scored near the thinking, extroversion, sensing, and judgment ends of the dimensions would tend to have a logical, analytical, objective, critical, and empirical decision-making style. However, some psychologists say that the MBTI lacks reliability and validity and is poorly constructed. Other studies suggest that these national or
cross-cultural differences in decision-making Decision-making is a mental activity which is an integral part of planning and action taking in a variety of contexts and at a vast range of levels, including, but not limited to, budget planning, education planning, policy making, and climbing the ...
exist across entire societies. For example,
Maris Martinsons Maris Martinsons is a professor of management currently associated with the City University of Hong Kong, the Stockholm School of Economics, and the University of Toronto. He received his B.A.Sc. in engineering science and MBA from the Universi ...
has found that American, Japanese and Chinese business leaders each exhibit a distinctive national style of decision-making. The Myers–Briggs typology has been the subject of criticism regarding its poor psychometric properties.


General decision-making style (GDMS)

In the general decision-making style (GDMS) test developed by Suzanne Scott and Reginald Bruce, there are five decision-making styles: rational, intuitive, dependent, avoidant, and spontaneous. These five different decision-making styles change depending on the context and situation, and one style is not necessarily better than any other. In the examples below, the individual is working for a company and is offered a job from a different company. * The ''rational'' style is an in-depth search for, and a strong consideration of, other options and/or information prior to making a decision. In this style, the individual would research the new job being offered, review their current job, and look at the pros and cons of taking the new job versus staying with their current company. * The ''intuitive'' style is confidence in one's initial feelings and gut reactions. In this style, if the individual initially prefers the new job because they have a feeling that the work environment is better suited for them, then they would decide to take the new job. The individual might not make this decision as soon as the job is offered. * The ''dependent'' style is asking for other people's input and instructions on what decision should be made. In this style, the individual could ask friends, family, coworkers, etc., but the individual might not ask all of these people. * The ''avoidant'' style is averting the responsibility of making a decision. In this style, the individual would not make a decision. Therefore, the individual would stick with their current job. * The ''spontaneous'' style is a need to make a decision as soon as possible rather than waiting to make a decision. In this style, the individual would either reject or accept the job as soon as it is offered.


Organizational vs. individual level

There are a few characteristics that differentiate organizational decision-making from individual decision-making as studied in lab experiments:Shapira, Z. (2002). "Organizational Decision Making. Cambridge Series on Judgment and Decision Making", Cambridge University Press: pp. 4–6. # Unlike most lab studies of individual decision-making, ''ambiguity'' is pervasive in organizations. There is often only ambiguous information, and there is ambiguity about preferences as well as about interpreting the history of decisions. # Decision-making in and by organizations is embedded in a ''longitudinal'' context, meaning that participants in organizational decision-making are a part of ongoing processes. Even if they don't take on active roles in all phases of decision-making, they are part of the Decision Process and its consequences. Decisions in organizations are made in a sequential manner, and commitment may be more important in such processes than judgmental accuracy. In contrast, most lab studies of individual decision-making are conducted in artificial settings (lab) that are not connected to the subjects’ ongoing activities. # ''Incentives'' play an important role in organizational decision-making. Incentives, penalties, and their ramifications are real and may have long-lasting effects. These effects are intensified due to the longitudinal nature of decision-making in organizational settings. Incentives and penalties are very salient in organizations, and often they command managerial attention. # Many executives, especially in middle management, may make ''repeated decisions'' on similar issues. Managers may develop a sense of using his/her skills (which may be faulty) and a sense of having control and using one's skills are pervasive in managerial thinking about risk taking. Several repeated decisions are made by following rules rather than by using pure information processing modes. # ''Conflict'' is pervasive in organizational decision-making. Many times power considerations and agenda setting determine decisions rather than calculations based on the decision's parameters. The nature of authority relations may have a large impact on the way decisions are made in organizations, which are basically political systems.


See also

*
Aboulomania Aboulomania () is a mental disorder in which the patient displays pathological indecisiveness. It is typically associated with anxiety, stress, depression, and mental anguish, severely affecting one's ability to function socially. Although many pe ...
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Adaptive performance Adaptive performance in the work environment refers to adjusting to and understanding change in the workplace.Pulakos, E. D., Arad, S., Donovan, M. A., & Plamondon, K. E. (2000). Adaptability in the workplace: development of a taxonomy of adaptive ...
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Agent (economics) In economics, an agent is an actor (more specifically, a decision maker) in a model of some aspect of the economy. Typically, every agent makes decisions by solving a well- or ill-defined optimization or choice problem. For example, ''buyers'' (c ...
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Analytic hierarchy process In the theory of decision making, the analytic hierarchy process (AHP), also analytical hierarchy process, is a structured technique for organizing and analyzing complex decisions, based on mathematics and psychology. It was developed by Tho ...
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Argument map An argument map or argument diagram is a visual representation of the structure of an argument. An argument map typically includes the key components of the argument, traditionally called the '' conclusion'' and the ''premises'', also called ''con ...
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Business decision mapping {{InfoMaps Business decision mapping (BDM) is a technique for making decisions, particularly for the kind of decisions that often need to be made in business. It involves using diagrams to help articulate and work through the decision problem, f ...
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Choice architecture Choice architecture is the design of different ways in which choices can be presented to decision makers, and the impact of that presentation on decision-making. For example, each of the following: * the number of choices presented * the manner i ...
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Choice modelling Choice modelling attempts to model the decision process of an individual or segment via revealed preferences or stated preferences made in a particular context or contexts. Typically, it attempts to use discrete choices (A over B; B over A, B & C) ...
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Concept driven strategy A concept-driven strategy is a process for formulating strategy that draws on the explanation of how humans inquire provided by linguistic pragmatic philosophy. This argues that thinking starts by selecting (explicitly or implicitly) a set of con ...
* Ordinal Priority Approach *
Decision downloading Decision downloadingClampitt,P. & Williams, M.(2007)Decision Downloading, MIT Sloan Management Review, Jan 1, 2 refers to communicating a decision to those who have not been involved in the decision-making process. The term “decision downloadi ...
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Decision fatigue In decision making and psychology, decision fatigue refers to the deteriorating quality of decisions made by an individual after a long session of decision making.. It is now understood as one of the causes of irrational trade-offs in decision m ...
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Decision quality Decision quality (DQ) is the quality of a decision at the moment the decision is made, regardless of its outcome. Decision quality concepts permit the assurance of both effectiveness and efficiency in analyzing decision problems. In that sense, de ...
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Decision-making software Decision-making software (DM software) is software for computer applications that help individuals and organisations make choices and take decisions, typically by ranking, prioritizing or choosing from a number of options. An early example of DM so ...
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Decision-making unit A buying center, also called decision-making unit (DMU), brings together "all those members of an organization who become involved in the buying process for a particular product or service". The concept of a DMU was developed in 1967 by Robin ...
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Emotional choice theory Emotional choice theory (also referred to as the "logic of affect") is a social scientific action model to explain human decision-making. Its foundation was laid in Robin Markwica’s monograph ''Emotional Choices'' published by Oxford University ...
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Foresight (psychology) Foresight is the ability to predict, or the action of predicting, what will happen or what is needed in the future. Studies suggest that much of human daily thought is directed towards potential future events. Because of this and its role in human ...
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Framing (social sciences) In the social sciences, framing comprises a set of concepts and theoretical perspectives on how individuals, groups, and societies organize, perceive, and communicate about reality. Framing can manifest in thought or interpersonal communicati ...
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Free will Free will is the capacity of agents to choose between different possible courses of action unimpeded. Free will is closely linked to the concepts of moral responsibility, praise, culpability, sin, and other judgements which apply only to actio ...
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Idea networking Idea networking is a qualitative method of doing a cluster analysis of any collection of statements, developed by Mike Metcalfe at the University of South Australia. Networking lists of statements acts to reduce them into a handful of clusters o ...
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Let Simon Decide Let Simon Decide was an online decision-making system based on decision science that uses complex algorithms and a personality test to help people make decisions. It emerged about the same time that Hunch.com launched and the two websites are ...
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Rational choice theory Rational choice theory refers to a set of guidelines that help understand economic and social behaviour. The theory originated in the eighteenth century and can be traced back to political economist and philosopher, Adam Smith. The theory postula ...
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Robust decision Robust decision-making (RDM) is an iterative decision analytics framework that aims to help identify potential robust strategies, characterize the vulnerabilities of such strategies, and evaluate the tradeoffs among them. RDM focuses on informing ...


References

{{Authority control Neuropsychological assessment Unsolved problems in neuroscience Analysis Prediction