Discuss the various models of Decision Making

There are several models of decision making that have been proposed by researchers over the years. These models can be broadly classified into two categories: normative models and descriptive models.

Normative models: Normative models are prescriptive in nature and focus on how decisions should be made, rather than how they are actually made. These models assume that decision makers are rational and that they have complete information about the decision problem. Some of the popular normative models are:

Discuss the various models of Decision Making

Expected Utility Theory: This theory assumes that decision makers are rational and that they can assign probabilities to the possible outcomes of a decision. The decision maker then chooses the option that has the highest expected utility, which is calculated as the sum of the utilities of the outcomes weighted by their respective probabilities.

Decision Tree Analysis: This technique is used to analyze decisions that involve multiple stages or alternatives. It involves constructing a tree-like diagram that represents the decision problem, and then calculating the expected value of each alternative.

Descriptive models: Descriptive models are based on how decisions are actually made, rather than how they should be made. These models recognize that decision makers may not always be rational, and may not have complete information about the decision problem. Some of the popular descriptive models are:

Prospect Theory: This theory proposes that decision makers evaluate outcomes relative to a reference point, such as their current situation. They are more sensitive to losses than to gains, and are risk-averse when facing gains but risk-seeking when facing losses.

Bounded Rationality: This concept proposes that decision makers are limited by their cognitive abilities and the information available to them. They may use heuristics or rules of thumb to simplify the decision process, rather than calculating expected values.

Intuition: This model proposes that decision makers rely on their intuition or gut feeling to make decisions. This approach is often used when the decision problem is complex or the decision maker lacks information.

Overall, each model has its own strengths and weaknesses, and the most appropriate model to use depends on the specific decision problem and the decision maker's preferences and cognitive abilities.


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Rational Decision Making Model: This model assumes that decision makers have complete information, are able to identify all possible alternatives, and choose the alternative that maximizes their expected utility or outcome. It typically involves several stages, including problem identification, gathering information, evaluating alternatives, making a choice, and implementing the decision.

Bounded Rationality Model: This model recognizes that decision makers are often constrained by time, information, and cognitive limitations. Therefore, they use heuristics or shortcuts to make decisions that are "good enough" rather than optimal. This model is based on the work of Herbert Simon, who argued that people have "bounded rationality" due to their limited cognitive abilities.

Intuition Model: This model proposes that decision makers rely on their intuition or gut feeling to make decisions. This approach is often used when the decision problem is complex or the decision maker lacks information. It is based on the idea that people have a wealth of tacit knowledge and experience that they can draw on to make intuitive judgments.

 

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Political Model: This model recognizes that decision making is often a political process that involves multiple stakeholders with competing interests. In this model, decision makers negotiate and compromise to reach a decision that is acceptable to all parties. It is based on the idea that decisions are made through a process of bargaining and power struggles.

Incremental Model: This model proposes that decisions are made gradually over time, as decision makers gather information and feedback from previous decisions. It is based on the idea that decisions are rarely made in isolation and that they build on previous decisions and experiences.

Overall, each model has its own strengths and weaknesses, and the most appropriate model to use depends on the specific decision problem and the decision maker's preferences and cognitive abilities.

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