Decision Making (Week 12)

Question 1

Simon’s Normative Model (Bounded Rationality)

Answer 1

Nonrational - people are restricted in the information they possess, conduct a limited search for solutions, and settle for less than optimal solutions.

Question 2

Garbage Can Model

Answer 2

Nonrational - decision making is haphazard, chaotic, unpredictable, and sometimes depends on luck.

Question 3

Rational Decision-Making Model

Answer 3

Assumes managers are completely objective and possess complete information to make a decision

Question 4

Bounded rationality

Answer 4

Decision makers are “bounded” or restricted by a variety of constraints when making decisions (time, money, resources)

Question 5

Satisficing

Answer 5

“Good enough” solution. Satisfactory and meets minimum qualifications.

Question 6

Judgemental heuristics

Answer 6

rules of thumb/shortcuts people use to reduce information-processing demands. Can help reduce uncertainty, but can lead to errors that reduce the quality of deciisons.