MGMT 405 Lecture Notes - Lecture 5: Confirmation Bias, Satisficing, Bounded Rationality
Document Summary
It is important to commit to taking enough time for decisions. Satisficing: a combination of the words satisfy and suffice , means settling for a less-than-perfect solution when working with limited information. Intuitive involves collecting as much data as possible and trying to find the optimal choice subconscious mind is automatic, rapidly consolidating data and producing a decision almost immediately: rational conscious mind requires more effort using logic and reason. Rational decision making: step 1: identify problem, step 2: establish decision criteria, step 3: weigh decision criteria, step 4: generate alternatives, step 5: evaluate alternatives, step 6: select the best alternative. Data, logic, and facts: rational decision making is defined not only by adherence to a careful process, but also by a logical, data-driven manner of following the steps of that process. In the evaluation stage, the process usually requires numeric values. If they are not fully weighted, the final analysis will lean toward whatever is easiest to measure.
