COMMERCE 1BA3 Lecture Notes - Lecture 12: Rationality, Predictably Irrational, Dan Ariely
8 Apr 2018
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Document Summary
Decision making is the process of developing a commitment to a chosen course of. Decision making can also be described as a process of problem solving . A problem exist when a gap is perceived between some existing state and some desired state. Decisions can be programmed or non- programmed. Reference - great book: khaneman (2011) thinking, fast & slow. Existing state is clear, the desired state is clear, and how to get from one state to another is fairly obvious. Repetitive and familiar - can be programmed A program is standardized way of solving a problem. Programs enable the decision maker to go directly from problem identification to solution. They are also known as rules, routines, standard operating procedures, or rules of thumb. They provide efficient means of solving well structured problems. Existing and desired states are unclear and the method of getting to the desired state is unknown. Unique and unusual problems that have not been encountered before.
