MAN 3025 Chapter Notes - Chapter 5: Bounded Rationality, Satisficing, Decision-Making
Document Summary
Decision making - process of identifying and choosing alternative action. System 1 intuitive and mainly unconscious: fast, automatic (eg. detecting hostility) System 2 analytical and conscious: slow, deliberate, use reasoning (eg. fill out tax form). Curse of knowledge: the more knowledgeable you are, the less you can think like a regular person. Specialization improves efficiency but leads to tunnel vision. In other words, as our knowledge and expertise grow, we may be less able to see things from an outsider"s perspective and make irrational decisions. (eg. engineers design electronics with so many buttons. People who design products are experts cursed by their knowledge, and they can"t imagine what it"s like to be as ignorant as the rest of us). Rational decision making: managers should make logical and optimal decisions. How to make improvements to get to the desirable. Implement: plan carefully, be sensitive to those affected: evaluation: to see how effective it is.
