Making better decisions - Coggle Diagram
Making better decisions
Decision making processes.
Rational choice model
exhaustive search and review of all alternatives.
yield optimal outcome
Limited search for alternatives
decisions are based on behavioral economics..
Rational decision process
establish the criteria
identify the possible alternatives.
Clarify the problem
4.Collect information about the relevant costs and benefits.
Out of pocket costs
Sunk cost bias
only include relevat information
disregard past losses/investments
set benchmarks for performance
keep a record of historical performance over time
Establish a decision criteria before searching for alternatives
encourage a thorough search and analysis of all alternatives
Status quo bias
value the opportunity costs
check the default setting