MHR 405 Chapter Notes - Chapter 7: Subjective Expected Utility, Mental Models, Mental Model

• School: Ryerson University
• Department: Human Resources
• Course: MHR 405
• Professor: Gordon Wang

Document Summary

Decision making and creativity: decision making is the conscious process of making choices among alternatives with the intention of moving toward some desired state of affairs. The decision is viewed through three paradigms which we will be discussing. Subjective expected utility is the probability (expectation) of satisfaction (utility) for each specific alternative in a decision. Rational choice assumes that decision makers naturally select the alternative that offers he greatest level of happiness (maximization) such as highest returns for stockholders, etc: there are 6 steps that loop in the rational decision making process: Then repeat: there are some problems with the rational choice paradigm, even though it seems so logical: It assumes people are efficient and logical information processing machines. In reality, people have difficulty recognizing problems, and why choices have failed. It also completely focuses on logical thinking and completely ignores the fact that emotions also influence, and in some cases dominate, the decision making process.