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

1. Simple Decision

• Use common sense or some rules of thumb.
  

2. Complicated Decision

• Use a simple check-list to remind us things to consider & helps to identify common decision making errors
  

3. 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

1. 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
  
  
  

3. Alternatives from which to choose

• Available courses of action that the person believes would lead to different future
  

4. Preferences

• which arise from different alternatives
• describe what the person wants.
• A high quality decision will have clear, carefully specified preferences
  

5. Information

• It costs resources
• A high quality decision process ensures that
  information acquisition is neither overdone nor underdone
  

6. 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

1. What you can do : Your alternatives
2. What you know : Your knowledge related to the alternatives about the future consequences
3. What you want : Your preferences on consequences

Decision quality chain
Elements of a good decision consists of :

1. Right Frame
2. Right alternatives
3. Right Values
4. Right Information
5. Right Reasoning
6. Decision Maker