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Chapter 1: Introduction to Quality Decision Making, Normative
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Normative
- Describe reality and actions as they are
- Normative decision theory models the most ideal decision for a given situation. In normative theory, an actor is assumed to be fully rational. Normative decisions always try to find the highest expected value outcome
Descriptive
- Identify how they should be
- Descriptive decision theory is more about what will occur in a situation, not what should. Descriptive decision theory takes into consideration outside factors that influence an actor’s decisions toward less optimal, less rational ends.
Deliberative Decision System
- the realm of reason, is the “cool cognitive system.”
- Should be developed and increase its role in decision making
Affective Decision System
- the “hot emotional system.”
was
- motivated by sex, fear, and hunger stimuli that were directly related to survival.
- Making decision by 'gut feel'
- The result of decision making might go wrong
Decisions are declared by human beings. Sometimes they arise when we have what philosophers call a break in our existence - some change in our circumstances- that impels us to declare a decision
Declaring decision reactively ( *change in circumstances)
- Can consider these decisions as reactive to the change.
(Whether experience a change for the worse, or the change for the better)
- For example: losing a job, inheriting money
Declaring decision proactively (*no change in circumstances)
- Declare decisions proactively, without any external stimulus.
- For example: quitting a job or taking up a skydiving just because you want to
Once decision is declared, less effort or extensive analysis required
Decision Analysis of Work
- Simple Decision
- Use common sense or some rules of thumb.
- Complicated Decision
- Use a simple check-list to remind us things to consider & helps to identify common decision making errors
- Rigorous Decision
- Involve elements of complexity, dynamics, and far-reaching consequences.
REGION 1: THOUGHT WITHOUT ACTION
- Includes more feelings towards someone or something
- Eg: “What a beautiful cloud!"
REGION 2: ACTION WITHOUT THOUGHT
- Reflex response to stimulus
- Take appropriate action in new situations, without thought, by acting on your inner knowledge
- Learn to ride a bicycle automatically without thinking, so a manual like this would be of little use.
REGION 3: NO THOUGHT-NO ACTION
- Eg: Being in coma, the state of unconsciousness produced by proper meditation
REGION 4: THOUGHT AND ACTION—“ACTIONAL THOUGHT”
- Decision analysis
- When we think about a decision, we are
practicing actional thought.
Decision - A decision is a choice between two or more alternatives that involves an irrevocable allocation of resources.
Decide - is to cut off, thinking about the decision does not indicate you are cutting off except the time spent for thinking
Stakeholder- Someone who can affect or affected by the decision
Decision making with uncertainty - because of fear of a bad outcome, or fear of regret, or even
fear of blame.
Solution : choose the best alternative at the moment of time by own preferences with considering uncertainty
Decision vs. outcome
Eventualities :
- Making a good decision with good outcome
- Making a good decision with bad outcome
- Making a bad decision with good outcome
- Making a bad decision with bad outcome
** The quality of decision won't affect the quality of result.
“A good decision is one that produces a desired outcome.”
“A good decision is one that has the lowest chance of getting the worst outcome.”
The Six Elements of Decision Quality
- The decision- maker
- The person who will act
- Commitment to actional thought (thinking while deciding at the same time)
2.A frame
- A way of viewing the decision
- Alternatives from which to choose
- Available courses of action that the person believes would lead to different future
- Preferences
- which arise from different alternatives
- describe what the person wants.
- A high quality decision will have clear, carefully specified preferences
- Information
- It costs resources
- A high quality decision process ensures that
information acquisition is neither overdone nor underdone
- The logic by which the decision is made.
- use some process to derive the action we should take
- use the best rules we know for this reasoning
The decision basis
- What you can do : Your alternatives
- What you know : Your knowledge related to the alternatives about the future consequences
- What you want : Your preferences on consequences
Decision quality chain
Elements of a good decision consists of :
- Right Frame
- Right alternatives
- Right Values
- Right Information
- Right Reasoning
- Decision Maker