MHR 505 Chapter Notes - Chapter 7: Subjective Expected Utility, Availability Heuristic, Representativeness Heuristic

71 views10 pages

Document Summary

Decision making: the conscious process of making choices among alternative with the intention of moving toward some desired state of affairs. Effective decision making involves identifying, selecting, and applying the best possible alternative; best decisions use pure logic and all available information to choose the alternative with the highest value. Rational choice paradigm: the view in decision making that people should and typically do use logic and all available information to choose the alternative with the highest value. Follow where wisdom leads rather than fall victim to passion and emotions. Best choice = greatest good for the greatest number > principle of utilitarianism & maximization. Subjective expected utility: the probability (expectation) of satisfaction (utility) resulting from choosing a specific alternative decision. Maximum depends on the value (utility) of outcomes resulting form that choice and the probability of those outcomes occurring. Problem: a deviation between the current and the desired situation the gap (cid:271)et(cid:449)ee(cid:374) (cid:862)(cid:449)hat is(cid:863) a(cid:374)d (cid:862)(cid:449)hat ought to (cid:271)e(cid:863)

Get access

Grade+
$40 USD/m
Billed monthly
Grade+
Homework Help
Study Guides
Textbook Solutions
Class Notes
Textbook Notes
Booster Class
10 Verified Answers
Class+
$30 USD/m
Billed monthly
Class+
Homework Help
Study Guides
Textbook Solutions
Class Notes
Textbook Notes
Booster Class
7 Verified Answers

Related Documents

Related Questions