decision-making theories
Decision-making theories explore how individuals and groups choose among alternatives. Key theories include: 1. **Rational Choice Theory**, which assumes people make decisions by considering all options and selecting the one that maximizes benefits. 2. **Bounded Rationality** posits that while people strive to make rational choices, cognitive limitations and incomplete information often lead to "satisficing"—choosing a satisfactory option rather than the optimal one. 3. **Prospect Theory** highlights how people value gains and losses differently, often fearing losses more than valuing equivalent gains, influencing their choices. These theories help us understand the complexities of human decision-making.
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Decision-making theories explore how individuals and groups choose among alternatives. Key theories include: 1. **Rational Decision-Making**: Assumes people make decisions by logically evaluating options based on known information to maximize outcomes. 2. **Bounded Rationality**: Recognizes limitations in information, cognitive capacity, and time, leading to "satisficing" – choosing an option that meets acceptable criteria rather than the best possible one. 3. **Intuitive Decision-Making**: Suggests decisions can also stem from gut feelings and experiences rather than formal analysis. 4. **Behavioral Decision Theory**: Examines how psychological factors and biases influence choices, often leading to irrational decisions.