Decision-making | Wikipedia audio article

In psychology, decision-making (also spelled
decision making and decisionmaking) is regarded as the cognitive process resulting in the
selection of a belief or a course of action among several alternative possibilities. Decision-making is the process of identifying
and choosing alternatives based on the values, preferences and beliefs of the decision-maker. Every decision-making process produces a final
choice, which may or may not prompt action. Research about decision-making is also published
under the label problem solving, in particular in European psychological research.==Overview==
Decision-making can be regarded as a problem-solving activity yielding a solution deemed to be
optimal, or at least satisfactory. It is therefore a process which can be more
or less rational or irrational and can be based on explicit or tacit knowledge and beliefs. Tacit knowledge is often used to fill the
gaps in complex decision making processes. Usually both of these types of knowledge,
tacit and explicit, are used together in the decision-making process. Human performance has been the subject of
active research from several perspectives: Psychological: examining individual decisions
in the context of a set of needs, preferences and values the individual has or seeks. Cognitive: the decision-making process regarded
as a continuous process integrated in the interaction with the environment. Normative: the analysis of individual decisions
concerned with the logic of decision-making, or communicative rationality, and the invariant
choice it leads to.A major part of decision-making involves the analysis of a finite set of alternatives
described in terms of evaluative criteria. Then the task might be to rank these alternatives
in terms of how attractive they are to the decision-maker(s) when all the criteria are
considered simultaneously. Another task might be to find the best alternative
or to determine the relative total priority of each alternative (for instance, if alternatives
represent projects competing for funds) when all the criteria are considered simultaneously. Solving such problems is the focus of multiple-criteria
decision analysis (MCDA). This area of decision-making, although very
old, has attracted the interest of many researchers and practitioners and is still highly debated
as there are many MCDA methods which may yield very different results when they are applied
on exactly the same data. This leads to the formulation of a decision-making
paradox. Logical decision-making is an important part
of all science-based professions, where specialists apply their knowledge in a given area to make
informed decisions. For example, medical decision-making often
involves a diagnosis and the selection of appropriate treatment. But naturalistic decision-making research
shows that in situations with higher time pressure, higher stakes, or increased ambiguities,
experts may use intuitive decision-making rather than structured approaches. They may follow a recognition primed decision
that fits their experience and arrive at a course of action without weighing alternatives.The
decision-maker’s environment can play a part in the decision-making process. For example, environmental complexity is a
factor that influences cognitive function. A complex environment is an environment with
a large number of different possible states which come and go over time. Studies done at the University of Colorado
have shown that more complex environments correlate with higher cognitive function,
which means that a decision can be influenced by the location. One experiment measured complexity in a room
by the number of small objects and appliances present; a simple room had less of those things. Cognitive function was greatly affected by
the higher measure of environmental complexity making it easier to think about the situation
and make a better decision.==Problem analysis==
It is important to differentiate between problem analysis and decision-making. Traditionally, it is argued that problem analysis
must be done first, so that the information gathered in that process may be used towards
decision-making. Characteristics of problem analysis
Problems are merely deviations from performance standards
Problems must be precisely identified and described
Problems are caused by a change from a distinctive feature
Something can always be used to distinguish between what has and hasn’t been affected
by a cause Causes of problems can be deduced from relevant
changes found in analyzing the problem Most likely cause of a problem is the one
that exactly explains all the facts, while having the fewest (or weakest) assumptions
(Occam’s razor).Characteristics of decision-making Objectives must first be established
Objectives must be classified and placed in order of importance
Alternative actions must be developed The alternatives must be evaluated against
all the objectives The alternative that is able to achieve all
the objectives is the tentative decision The tentative decision is evaluated for more
possible consequences The decisive actions are taken, and additional
actions are taken to prevent any adverse consequences from becoming problems and starting both systems
(problem analysis and decision-making) all over again
There are steps that are generally followed that result in a decision model that can be
used to determine an optimal production plan In a situation featuring conflict, role-playing
may be helpful for predicting decisions to be made by involved parties===
Analysis paralysis===Analysis paralysis is the state of over-analyzing
(or over-thinking) a situation so that a decision or action is never taken, in effect paralyzing
the outcome.===Information overload===Information overload is “a gap between the
volume of information and the tools we have to assimilate” it. Information used in decision making is to
reduce or eliminate uncertainty. Excessive information affects problem processing
and tasking, which affects decision-making. Crystal C. Hall and colleagues described an
“illusion of knowledge”, which means that as individuals encounter too much knowledge
it can interfere with their ability to make rational decisions.===Post-decision analysis===
Evaluation and analysis of past decisions is complementary to decision-making. See also Mental accounting and Postmortem
Decision-making is a region of intense study in the fields of systems neuroscience, and
cognitive neuroscience. Several brain structures, including the anterior
cingulate cortex (ACC), orbitofrontal cortex and the overlapping ventromedial prefrontal
cortex are believed to be involved in decision-making processes. A neuroimaging study found distinctive patterns
of neural activation in these regions depending on whether decisions were made on the basis
of perceived personal volition or following directions from someone else. Patients with damage to the ventromedial prefrontal
cortex have difficulty making advantageous decisions.A common laboratory paradigm for
studying neural decision-making is the two-alternative forced choice task (2AFC), in which a subject
has to choose between two alternatives within a certain time. A study of a two-alternative forced choice
task involving rhesus monkeys found that neurons in the parietal cortex not only represent
the formation of a decision but also signal the degree of certainty (or “confidence”)
associated with the decision. Another recent study found that lesions to
the ACC in the macaque resulted in impaired decision-making in the long run of reinforcement
guided tasks suggesting that the ACC may be involved in evaluating past reinforcement
information and guiding future action. A 2012 study found that rats and humans can
optimally accumulate incoming sensory evidence, to make statistically optimal decisions.===Emotions===Emotion appears able to aid the decision-making
process. Decision-making often occurs in the face of
uncertainty about whether one’s choices will lead to benefit or harm (see also Risk). The somatic marker hypothesis is a neurobiological
theory of how decisions are made in the face of uncertain outcome. This theory holds that such decisions are
aided by emotions, in the form of bodily states, that are elicited during the deliberation
of future consequences and that mark different options for behavior as being advantageous
or disadvantageous. This process involves an interplay between
neural systems that elicit emotional/bodily states and neural systems that map these emotional/bodily
states. A recent lesion mapping study of 152 patients
with focal brain lesions conducted by Aron K. Barbey and colleagues provided evidence
to help discover the neural mechanisms of emotional intelligence.==Decision-making techniques==
Decision-making techniques can be separated into two broad categories: group decision-making
techniques and individual decision-making techniques. Individual decision-making techniques can
also often be applied by a group.===Group===
Consensus decision-making tries to avoid “winners” and “losers”. Consensus requires that a majority approve
a given course of action, but that the minority agree to go along with the course of action. In other words, if the minority opposes the
course of action, consensus requires that the course of action be modified to remove
objectionable features. Voting-based methods:
Majority requires support from more than 50% of the members of the group. Thus, the bar for action is lower than with
consensus. Plurality, where the largest block in a group
decides, even if it falls short of a majority. Quadratic voting allows participants to cast
their preference and intensity of preference for each decision (as opposed to a simple
for or against decision). It addresses issues of voting paradox and
majority-rule. Range voting lets each member score one or
more of the available options. The option with the highest average is chosen. This method has experimentally been shown
to produce the lowest Bayesian regret among common voting methods, even when voters are
strategic. Delphi method is a structured communication
technique for groups, originally developed for collaborative forecasting but has also
been used for policy making. Dotmocracy is a facilitation method that relies
on the use of special forms called Dotmocracy Sheets to allow large groups to collectively
brainstorm and recognize agreement on an unlimited number of ideas they have authored. Participative decision-making occurs when
an authority opens up the decision-making process to a group of people for a collaborative
effort. Decision engineering uses a visual map of
the decision-making process based on system dynamics and can be automated through a decision
modeling tool, integrating big data, machine learning, and expert knowledge as appropriate.===Individual===
Decisional balance sheet: listing the advantages and disadvantages (benefits and costs, pros
and cons) of each option, as suggested by Plato’s Protagoras and by Benjamin Franklin. Expected-value optimization: choosing the
alternative with the highest probability-weighted utility, possibly with some consideration
for risk aversion. This may involve considering the opportunity
cost of different alternatives. See also Decision analysis and Decision theory. Satisficing: examining alternatives only until
the first acceptable one is found. The opposite is maximizing or optimizing,
in which many or all alternatives are examined in order to find the best option. Acquiesce to a person in authority or an “expert”;
“just following orders”. Anti-authoritarianism: taking the most opposite
action compared to the advice of mistrusted authorities. Flipism e.g. flipping a coin, cutting a deck
of playing cards, and other random or coincidence methods – or prayer, tarot cards, astrology,
augurs, revelation, or other forms of divination, superstition or pseudoscience. Automated decision support: setting up criteria
for automated decisions. Decision support systems: using decision-making
software when faced with highly complex decisions or when considering many stakeholders, categories,
or other factors that affect decisions.==Steps==
A variety of researchers have formulated similar prescriptive steps aimed at improving decision-making.===GOFER===
In the 1980s, psychologist Leon Mann and colleagues developed a decision-making process called
GOFER, which they taught to adolescents, as summarized in the book Teaching Decision Making
To Adolescents. The process was based on extensive earlier
research conducted with psychologist Irving Janis. GOFER is an acronym for five decision-making
steps: Goals clarification: Survey values and objectives. Options generation: Consider a wide range
of alternative actions. Facts-finding: Search for information. Consideration of Effects: Weigh the positive
and negative consequences of the options. Review and implementation: Plan how to review
the options and implement them.===DECIDE===
In 2008, Kristina Guo published the DECIDE model of decision-making, which has six parts:
Define the problem Establish or Enumerate all the criteria (constraints)
Consider or Collect all the alternatives Identify the best alternative
Develop and implement a plan of action Evaluate and monitor the solution and examine
feedback when necessary===
Other===In 2007, Pam Brown of Singleton Hospital in
Swansea, Wales, divided the decision-making process into seven steps:
Outline the goal and outcome. Gather data. Develop alternatives (i.e., brainstorming). List pros and cons of each alternative. Make the decision. Immediately take action to implement it. Learn from and reflect on the decision.In
2009, professor John Pijanowski described how the Arkansas Program, an ethics curriculum
at the University of Arkansas, used eight stages of moral decision-making based on the
work of James Rest: Establishing community: Create and nurture
the relationships, norms, and procedures that will influence how problems are understood
and communicated. This stage takes place prior to and during
a moral dilemma. Perception: Recognize that a problem exists. Interpretation: Identify competing explanations
for the problem, and evaluate the drivers behind those interpretations. Judgment: Sift through various possible actions
or responses and determine which is more justifiable. Motivation: Examine the competing commitments
which may distract from a more moral course of action and then prioritize and commit to
moral values over other personal, institutional or social values. Action: Follow through with action that supports
the more justified decision. Reflection in action. Reflection on action.===Group stages===
According to B. Aubrey Fisher, there are four stages or phases that should be involved in
all group decision-making: Orientation. Members meet for the first time and start
to get to know each other. Conflict. Once group members become familiar with each
other, disputes, little fights and arguments occur. Group members eventually work it out. Emergence. The group begins to clear up vague opinions
by talking about them. Reinforcement. Members finally make a decision and provide
justification for it.It is said that establishing critical norms in a group improves the quality
of decisions, while the majority of opinions (called consensus norms) do not.Conflicts
in socialization are divided in to functional and dysfunctional types. Functional conflicts are mostly the questioning
the managers assumptions in their decision making and dysfunctional conflicts are like
personal attacks and every action which decrease team effectiveness. Functional conflicts are the better ones to
gain higher quality decision making caused by the increased team knowledge and shared
understanding.==Rational and irrational==
In economics, it is thought that if humans are rational and free to make their own decisions,
then they would behave according to rational choice theory. Rational choice theory says that a person
consistently makes choices that lead to the best situation for himself or herself, taking
into account all available considerations including costs and benefits; the rationality
of these considerations is from the point of view of the person himself, so a decision
is not irrational just because someone else finds it questionable. In reality, however, there are some factors
that affect decision-making abilities and cause people to make irrational decisions
– for example, to make contradictory choices when faced with the same problem framed in
two different ways (see also Allais paradox). One of the most prominent theories of decision
making is subjective expected utility (SEU) theory, which describes the rational behavior
of the decision maker. The decision maker assesses different alternatives
by their utilities and the subjective probability of occurrence.Rational decision-making is
often grounded on experience and theories exist that are able to put this approach on
solid mathematical grounds so that subjectivity is reduced to a minimum, see e.g. scenario
optimization.==In adolescents vs. adults==
During their adolescent years, teens are known for their high-risk behaviors and rash decisions. Recent research has shown that there are differences
in cognitive processes between adolescents and adults during decision-making. Researchers have concluded that differences
in decision-making are not due to a lack of logic or reasoning, but more due to the immaturity
of psychosocial capacities that influence decision-making. Examples of their undeveloped capacities which
influence decision-making would be impulse control, emotion regulation, delayed gratification
and resistance to peer pressure. In the past, researchers have thought that
adolescent behavior was simply due to incompetency regarding decision-making. Currently, researchers have concluded that
adults and adolescents are both competent decision-makers, not just adults. However, adolescents’ competent decision-making
skills decrease when psychosocial capacities become present. Recent research has shown that risk-taking
behaviors in adolescents may be the product of interactions between the socioemotional
brain network and its cognitive-control network. The socioemotional part of the brain processes
social and emotional stimuli and has been shown to be important in reward processing. The cognitive-control network assists in planning
and self-regulation. Both of these sections of the brain change
over the course of puberty. However, the socioemotional network changes
quickly and abruptly, while the cognitive-control network changes more gradually. Because of this difference in change, the
cognitive-control network, which usually regulates the socioemotional network, struggles to control
the socioemotional network when psychosocial capacities are present.When adolescents are
exposed to social and emotional stimuli, their socioemotional network is activated as well
as areas of the brain involved in reward processing. Because teens often gain a sense of reward
from risk-taking behaviors, their repetition becomes ever more probable due to the reward
experienced. In this, the process mirrors addiction. Teens can become addicted to risky behavior
because they are in a high state of arousal and are rewarded for it not only by their
own internal functions but also by their peers around them. Adults are generally better able to control
their risk-taking because their cognitive-control system has matured enough to the point where
it can control the socioemotional network, even in the context of high arousal or when
psychosocial capacities are present. Also, adults are less likely to find themselves
in situations that push them to do risky things. For example, teens are more likely to be around
peers who peer pressure them into doing things, while adults are not as exposed to this sort
of social setting.A recent study suggests that adolescents have difficulties adequately
adjusting beliefs in response to bad news (such as reading that smoking poses a greater
risk to health than they thought), but do not differ from adults in their ability to
alter beliefs in response to good news. This creates biased beliefs, which may lead
to greater risk taking.==Cognitive and personal biases==
Biases usually affect decision-making processes. They appear more when decision task has time
pressure, is done under high stress and/or task is highly complex.Here is a list of commonly
debated biases in judgment and decision-making: Selective search for evidence (also known
as confirmation bias): People tend to be willing to gather facts that support certain conclusions
but disregard other facts that support different conclusions. Individuals who are highly defensive in this
manner show significantly greater left prefrontal cortex activity as measured by EEG than do
less defensive individuals. Premature termination of search for evidence:
People tend to accept the first alternative that looks like it might work. Cognitive inertia is the unwillingness to
change existing thought patterns in the face of new circumstances. Selective perception: People actively screen
out information that they do not think is important (see also Prejudice). In one demonstration of this effect, discounting
of arguments with which one disagrees (by judging them as untrue or irrelevant) was
decreased by selective activation of right prefrontal cortex. Wishful thinking is a tendency to want to
see things in a certain – usually positive – light, which can distort perception and
thinking. Choice-supportive bias occurs when people
distort their memories of chosen and rejected options to make the chosen options seem more
attractive. Recency: People tend to place more attention
on more recent information and either ignore or forget more distant information (see Semantic
priming). The opposite effect in the first set of data
or other information is termed primacy effect. Repetition bias is a willingness to believe
what one has been told most often and by the greatest number of different sources. Anchoring and adjustment: Decisions are unduly
influenced by initial information that shapes our view of subsequent information. Groupthink is peer pressure to conform to
the opinions held by the group. Source credibility bias is a tendency to reject
a person’s statement on the basis of a bias against the person, organization, or group
to which the person belongs. People preferentially accept statement by
others that they like (see also Prejudice). Incremental decision-making and escalating
commitment: People look at a decision as a small step in a process, and this tends to
perpetuate a series of similar decisions. This can be contrasted with zero-based decision-making
(see Slippery slope). Attribution asymmetry: People tend to attribute
their own success to internal factors, including abilities and talents, but explain their failures
in terms of external factors such as bad luck. The reverse bias is shown when people explain
others’ success or failure. Role fulfillment is a tendency to conform
to others’ decision-making expectations. Underestimating uncertainty and the illusion
of control: People tend to underestimate future uncertainty because of a tendency to believe
they have more control over events than they really do. Framing bias: This is best avoided by increasing
numeracy and presenting data in several formats (for example, using both absolute and relative
scales).Sunk-cost fallacy is a specific type of framing effect that affects decision-making. It involves an individual making a decision
about a current situation based on what they have previously invested in the situation. An example of this would be an individual
that is refraining from dropping a class that they are most likely to fail, due to the fact
that they feel as though they have done so much work in the course thus far. Prospect theory involves the idea that when
faced with a decision-making event, an individual is more likely to take on a risk when evaluating
potential losses, and are more likely to avoid risks when evaluating potential gains. This can influence one’s decision-making depending
if the situation entails a threat, or opportunity. Optimism bias is a tendency to overestimate
the likelihood of positive events occurring in the future and underestimate the likelihood
of negative life events. Such biased expectations are generated and
maintained in the face of counter-evidence through a tendency to discount undesirable
information. An optimism bias can alter risk perception
and decision-making in many domains, ranging from finance to health. Reference class forecasting was developed
to eliminate or reduce cognitive biases in decision-making.==Cognitive limitations in groups==In groups, people generate decisions through
active and complex processes. One method consists of three steps: initial
preferences are expressed by members; the members of the group then gather and share
information concerning those preferences; finally, the members combine their views and
make a single choice about how to face the problem. Although these steps are relatively ordinary,
judgements are often distorted by cognitive and motivational biases, include “sins of
commission”, “sins of omission”, and “sins of imprecision”.==Cognitive styles=====
Optimizing vs. satisficing===Herbert A. Simon coined the phrase “bounded
rationality” to express the idea that human decision-making is limited by available information,
available time and the mind’s information-processing ability. Further psychological research has identified
individual differences between two cognitive styles: maximizers try to make an optimal
decision, whereas satisficers simply try to find a solution that is “good enough”. Maximizers tend to take longer making decisions
due to the need to maximize performance across all variables and make tradeoffs carefully;
they also tend to more often regret their decisions (perhaps because they are more able
than satisficers to recognise that a decision turned out to be sub-optimal).===
Intuitive vs. rational===The psychologist Daniel Kahneman, adopting
terms originally proposed by the psychologists Keith Stanovich and Richard West, has theorized
that a person’s decision-making is the result of an interplay between two kinds of cognitive
processes: an automatic intuitive system (called “System 1”) and an effortful rational system
(called “System 2”). System 1 is a bottom-up, fast, and implicit
system of decision-making, while system 2 is a top-down, slow, and explicit system of
decision-making. System 1 includes simple heuristics in judgment
and decision-making such as the affect heuristic, the availability heuristic, the familiarity
heuristic, and the representativeness heuristic.===Combinatorial vs. positional===
Styles and methods of decision-making were elaborated by Aron Katsenelinboigen, the founder
of predispositioning theory. In his analysis on styles and methods, Katsenelinboigen
referred to the game of chess, saying that “chess does disclose various methods of operation,
notably the creation of predisposition-methods which may be applicable to other, more complex
systems.”Katsenelinboigen states that apart from the methods (reactive and selective)
and sub-methods (randomization, predispositioning, programming), there are two major styles:
positional and combinational. Both styles are utilized in the game of chess. According to Katsenelinboigen, the two styles
reflect two basic approaches to uncertainty: deterministic (combinational style) and indeterministic
(positional style). Katsenelinboigen’s definition of the two styles
are the following. The combinational style is characterized by: a very narrow, clearly defined, primarily
material goal; and a program that links the initial position
with the final outcome.In defining the combinational style in chess, Katsenelinboigen wrote: “The
combinational style features a clearly formulated limited objective, namely the capture of material
(the main constituent element of a chess position). The objective is implemented via a well-defined,
and in some cases, unique sequence of moves aimed at reaching the set goal. As a rule, this sequence leaves no options
for the opponent. Finding a combinational objective allows the
player to focus all his energies on efficient execution, that is, the player’s analysis
may be limited to the pieces directly partaking in the combination. This approach is the crux of the combination
and the combinational style of play.The positional style is distinguished by: a positional goal; and
a formation of semi-complete linkages between the initial step and final outcome.”Unlike
the combinational player, the positional player is occupied, first and foremost, with the
elaboration of the position that will allow him to develop in the unknown future. In playing the positional style, the player
must evaluate relational and material parameters as independent variables. … The positional style gives the player
the opportunity to develop a position until it becomes pregnant with a combination. However, the combination is not the final
goal of the positional player – it helps him to achieve the desirable, keeping in mind
a predisposition for the future development. The pyrrhic victory is the best example of
one’s inability to think positionally.”The positional style serves to: create a predisposition to the future development
of the position; induce the environment in a certain way;
absorb an unexpected outcome in one’s favor; and
avoid the negative aspects of unexpected outcomes.===Influence of Myers-Briggs type===
According to Isabel Briggs Myers, a person’s decision-making process depends to a significant
degree on their cognitive style. Myers developed a set of four bi-polar dimensions,
called the Myers-Briggs Type Indicator (MBTI). The terminal points on these dimensions are:
thinking and feeling; extroversion and introversion; judgment and perception; and sensing and intuition. She claimed that a person’s decision-making
style correlates well with how they score on these four dimensions. For example, someone who scored near the thinking,
extroversion, sensing, and judgment ends of the dimensions would tend to have a logical,
analytical, objective, critical, and empirical decision-making style. However, some psychologists say that the MBTI
lacks reliability and validity and is poorly constructed.Other studies suggest that these
national or cross-cultural differences in decision-making exist across entire societies. For example, Maris Martinsons has found that
American, Japanese and Chinese business leaders each exhibit a distinctive national style
of decision-making.===General decision-making style (GDMS)===
In the general decision-making style (GDMS) test developed by Suzanne Scott and Reginald
Bruce, there are five decision-making styles: rational, intuitive, dependent, avoidant,
and spontaneous. These five different decision-making styles
change depending on the context and situation, and one style is not necessarily better than
any other. In the examples below, the individual is working
for a company and is offered a job from a different company. The rational style is an in-depth search for,
and a strong consideration of, other options and/or information prior to making a decision. In this style, the individual would research
the new job being offered, review their current job, and look at the pros and cons of taking
the new job versus staying with their current company. The intuitive style is confidence in one’s
initial feelings and gut reactions. In this style, if the individual initially
prefers the new job because they have a feeling that the work environment is better suited
for them, then they would decide to take the new job. The individual might not make this decision
as soon as the job is offered. The dependent style is asking for other people’s
input and instructions on what decision should be made. In this style, the individual could ask friends,
family, coworkers, etc., but the individual might not ask all of these people. The avoidant style is averting the responsibility
of making a decision. In this style, the individual would not make
a decision. Therefore, the individual would stick with
their current job. The spontaneous style is a need to make a
decision as soon as possible rather than waiting to make a decision. In this style, the individual would either
reject or accept the job as soon as it is offered.==See also

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