scholarly journals RATIONALITY OR IRRATIONALITY? DECISION TO QUIT A JOB TO START A BUSINESS

2021 ◽  
Vol 9 (08) ◽  
pp. 342-346
Author(s):  
Aliyu Aminu Ahmed ◽  
◽  
Ruqayya Aminu Muhammad ◽  
Keyword(s):  
Decision Making ◽  
Cognitive Processes ◽  
Emerging Economies ◽  
Utility Theory ◽  
Utility Maximization ◽  
Decision Makers ◽  
Management Consulting ◽  
Economic Man ◽  
Set Up ◽  
Classical Decision

The paper discusses rationality and decision making with a critical reflection on decisions by employees to quit jobs and set up fragile, micro, and rival businesses. This is a common phenomenon in management consulting businesses in especially emerging economies, where the demand for consultancy services is ballooning. The concepts of decision making and factors that influence decision making were discussed. Rationality and irrationality within the context of economics were briefly defined and theories such as (1) The utility theory , (2) The utility maximization theory and (3)The classical decision theory were used to explain the phenomenon. It was found that reasons for quitting or staying in a management consulting job is not only motivated by preparedness or readiness, rather a complex array of factors, some of which are observable and explainable while others may be attributable to complex cognitive processes that cannot be easily observed and explained. Deciding to leave a job is a complex but intentional rational decision that is influenced by many factors, some of which are observable, environmental, and cognitive. It is in the nature of the economic man to always decide, consequences of which might be sometimes predictable or influenced by events outside of the decision-makers control.

scholarly journals Role of Information in Decision Making of Social Agents

2015 ◽  
Vol 14 (05) ◽  
pp. 1129-1166 ◽  
Author(s):  
Vyacheslav I. Yukalov ◽  
Didier Sornette
Keyword(s):  
Decision Making ◽  
Decision Theory ◽  
Utility Theory ◽  
Decision Makers ◽  
Mathematical Framework ◽  
Social Agents ◽  
Additional Information ◽  
Probabilistic Version ◽  
Classical Decision

The influence of additional information on the decision making of agents, who are the interacting members of a society, is analyzed within the mathematical framework based on the use of quantum probabilities. The introduction of social interactions, which influence the decisions of individual agents, leads to a generalization of the quantum decision theory (QDT) developed earlier by the authors for separate individuals. The generalized approach is free of the standard paradoxes of classical decision theory. This approach also explains the error-attenuation effects observed for the paradoxes occurring when decision makers, who are members of a society, consult with each other, increasing in this way the available mutual information. A precise correspondence between QDT and classical utility theory is formulated via the introduction of an intermediate probabilistic version of utility theory of a novel form, which obeys the requirement that zero-utility prospects should have zero probability weights.

D Minus Months: Strategic Planning for Weather-Sensitive Decisions

2021 ◽  
Author(s):  
Eva D. Regnier ◽  
Joel W. Feldmeier
Keyword(s):  
Decision Making ◽  
Decision Analysis ◽  
Weather Forecasting ◽  
Decision Makers ◽  
Strategic Decisions ◽  
Sequential Decisions ◽  
Weather Forecasts ◽  
Current State ◽  
Set Up ◽  
Made In

General Eisenhower’s decisions to postpone and, one day later, to launch the “D-Day” invasion of Normandy are a gripping illustration of sequential decisions under uncertainty, suitable for any introductory decision analysis class. They’re also the archetypal example of weather-sensitive decision making using a forecast. This paper develops a framework for analyzing weather-sensitive decisions with a focus on the less-familiar strategic decisions that determine how forecasts are produced and what operational alternatives are available so that decision makers can extract value from forecasts. We tell the story of the decisions made in the months before D-Day regarding how to set up the forecasting process and the myriad decisions implicating nation-level resources that prepared Allied forces not just to invade, but to hold open that decision until the last possible hour so that Eisenhower and his staff could use the critical forecasts. Finally, we overview the current state of the weather-forecasting enterprise, the current challenges of interest to decision analysts, and what this means for decision analysts seeking opportunities to help the weather enterprise improve forecasts and to help operational decision makers extract more value from modern weather forecasts.

Rationality and risk-taking in Russia’s first Chechen War: toward a theory of cognitive realism

2010 ◽  
Vol 2 (2) ◽  
pp. 187-210
Author(s):  
Jason J. Morrissette
Keyword(s):  
Decision Making ◽  
International Relations ◽  
Risk Taking ◽  
Utility Maximization ◽  
Decision Makers ◽  
Adequate Explanation ◽  
Russian President ◽  
Decision Making Processes ◽  
Cognitive Realism ◽  
Made In

This article seeks to establish a better scholarly understanding of former Russian President Boris Yeltsin’s decision to launch an ill-planned, risky, and ultimately disastrous invasion of the breakaway republic of Chechnya in 1994. Examining the decision-making environment that led up to the invasion, I conclude that while neorealism provides an adequate explanation for Yeltsin’s motives in this case, the decisions that he made in pursuit of these goals do not reflect the logic of rational utility maximization commonly associated with neorealist theory. Instead, I suggest that prospect theory – based on the idea that decision-makers tend to be risk averse when confronted with choices between gains while risk acceptant when confronted with losses – offers significantly more explanatory insight in this case. Thus, the article offers further support for an alternative theoretical approach to international relations that some scholars have termed ‘cognitive realism’, incorporating neorealist motives with a more empirically accurate perspective on the decision-making processes undertaken in pursuit of these motives.

PRE-COVERAGE ASSESSMENTS OF NEW HOSPITAL INTERVENTIONS ON AUSTRIA: METHODOLOGY AND 3 YEARS OF EXPERIENCE

2012 ◽  
Vol 28 (2) ◽  
pp. 171-179 ◽  
Author(s):  
Philipp Mad ◽  
Sabine Geiger-Gritsch ◽  
Gerda Hinterreiter ◽  
Stefan Mathis-Edenhofer ◽  
Claudia Wild
Keyword(s):  
Decision Making ◽  
New Technologies ◽  
Decision Makers ◽  
Medical Services ◽  
Decision Making Process ◽  
Relevant Evidence ◽  
Objective Evidence ◽  
The Status ◽  
Set Up ◽  
Grade Methodology

Objectives: A new decision-making process was set up by the Austrian Ministry of Health to regulate coverage of new proposed Extra Medical Services (EMS; German: Medizinische Einzel-Leistung [MEL]) in 2008. As part of the annual decision-making process an independent academic institution (LBI-HTA) is evaluating relevant evidence on these new technologies and provides HTAs, including evidence-based recommendations for decision makers.Methods: About ten EMS assessments are performed annually by the LBI-HTA simultaneously between January and March. Each peer-reviewed report consists of a systematic literature review and critical appraisal of evidence using the GRADE methodology. The generation of numerous reports of good quality standards within the short timeframe is achieved by a standardized workflow with predefined assignment of tasks for all participants.Results: In total, the LBI-HTA performed twenty-five EMS assessments on thirty-three different interventions in the last three years. Coverage was recommended with limitation for eleven (33%) interventions, and not recommended for twenty-two (66%) interventions. The federal health commission decided on acceptance or preliminary acceptance of coverage in seven (22%) cases, rejection in eighteen (55%) cases and changed the status to “subject to approval” in seven (24%) cases.Conclusions: Pre-coverage assessment of new hospital interventions was implemented successfully in Austria. It has proved to be a useful tool to support decision makers with objective evidence when deciding whether or not to reimburse medical services.

scholarly journals Uncertainty and computational complexity

2018 ◽  
Vol 374 (1766) ◽  
pp. 20180138 ◽  
Author(s):  
Peter Bossaerts ◽  
Nitin Yadav ◽  
Carsten Murawski
Keyword(s):  
Decision Making ◽  
Computational Complexity ◽  
Risk Taking ◽  
Utility Maximization ◽  
Decision Makers ◽  
Primary Concern ◽  
Subjective Beliefs ◽  
Theoretical Perspectives ◽  
New Information ◽  
Savage Axioms

Modern theories of decision-making typically model uncertainty about decision options using the tools of probability theory. This is exemplified by the Savage framework, the most popular framework in decision-making research. There, decision-makers are assumed to choose from among available decision options as if they maximized subjective expected utility, which is given by the utilities of outcomes in different states weighted with subjective beliefs about the occurrence of those states. Beliefs are captured by probabilities and new information is incorporated using Bayes’ Law. The primary concern of the Savage framework is to ensure that decision-makers’ choices are rational . Here, we use concepts from computational complexity theory to expose two major weaknesses of the framework. Firstly, we argue that in most situations, subjective utility maximization is computationally intractable, which means that the Savage axioms are implausible. We discuss empirical evidence supporting this claim. Secondly, we argue that there exist many decision situations in which the nature of uncertainty is such that (random) sampling in combination with Bayes’ Law is an ineffective strategy to reduce uncertainty. We discuss several implications of these weaknesses from both an empirical and a normative perspective. This article is part of the theme issue ‘Risk taking and impulsive behaviour: fundamental discoveries, theoretical perspectives and clinical implications’.

scholarly journals Heart Rate Variability and Decision-Making: Autonomic Responses in Making Decisions

2021 ◽  
Vol 11 (2) ◽  
pp. 243
Author(s):  
Giuseppe Forte ◽  
Matteo Morelli ◽  
Maria Casagrande
Keyword(s):  
Decision Making ◽  
Heart Rate ◽  
Heart Rate Variability ◽  
Cognitive Processes ◽  
Iowa Gambling Task ◽  
Decision Makers ◽  
Good Decision ◽  
Valid Index ◽  
Inhibitory Circuit ◽  
The Relationship

Decision-making is one of the most crucial cognitive processes in daily life. An adaptable, rapid, and flexible decision requires integration between brain and body. Heart rate variability (HRV) indexes this brain–body connection and appears to be related to cognitive performance. However, its relationship with decision-making is poorly analyzed. This study investigates the relationship between HRV and the decision-making process, assessed through the Iowa Gambling Task (IGT). One hundred and thirty healthy university students (mean age = 23.35 ± 2.50) participated in the study. According to IGT performance, they were divided into high decision-makers (n = 79) and low decision-makers (n = 51). Heart rate variability was measured in the resting, reactivity (i.e., during IGT), and recovery phases. Higher vagally mediated HRV (vmHRV; indexed in frequency domain measures) was evidenced in good decision-makers in the resting, reactivity, and recovery phases. During the task, a higher vagal modulation after a first evaluation was highlighted in good decision-makers. In conclusion, HRV proves to be a valid index of inhibitory circuit functioning in the prefrontal cortex. The relationship with cognitive functions was also confirmed, considering the ability to inhibit disadvantageous responses and make better decisions.

scholarly journals Risk Aversion and Emotions in DoND

2016 ◽  
Vol 9 (1) ◽  
pp. 32 ◽  
Author(s):  
Mehmet Burak Kahyaoglu ◽  
Özgür Ican
Keyword(s):  
Decision Making ◽  
Risk Aversion ◽  
Cognitive Processes ◽  
Decision Makers ◽  
Test Bed ◽  
Television Shows ◽  
Reading Software ◽  
Decision Making Behavior ◽  
Face Reading ◽  
Tv Show

Contrary to the traditional economic school of thought, emotions known to have a huge effect on cognitive processes leading to decisions. In this context, it can be observed that some television shows provide a very appropriate test-bed for examining decision-making behavior under risk. This study attempts to estimate the degree of Arrow-Pratt RRA for a group of decision-makers composed of 101 “Deal or No Deal” TV show contestants. For further analysis, a “face-reading” software was employed in order to identify emotions experienced by contestants at various parts of the game, and the influence of such emotions on the risk aversion behavior. Our findings suggest that emotions have an influence on the decisions of the contestants.

scholarly journals A New Fuzzy Multiple Attribute Decision Making Method Based on the Utility Transformation Functions

Symmetry ◽  
2019 ◽  
Vol 11 (3) ◽  
pp. 418
Author(s):  
Yuting Zuo ◽  
Chunfang Chen
Keyword(s):  
Decision Making ◽  
Utility Theory ◽  
Weighted Average ◽  
Multiple Attribute Decision Making ◽  
Decision Makers ◽  
Linguistic Information ◽  
Operational Laws ◽  
Multiple Attribute ◽  
Transformation Functions ◽  
The Difference

The 2-tuple linguistic information model (2TLIM) is a useful tool to avoid the loss of information, which has been widely adapted in the study of the multiple attribute decision making (MADM) problem. However, there is a limitation, the limitation is that the difference between the neighboring 2-tuple linguistic information is fixed regardless of the decision-makers’ attitude. In this paper, we define the utility transformation functions based on the 2-tuple linguistic utility to overcome the drawback. Firstly, by introducing the economic utility theory, the 2-tuple linguistic utility is defined, the 2-tuple linguistic utility parameter (2TLUP) and the 2-tuple linguistic marginal utility (2TLMU) are constructed to achieve the measurement of the decision-makers’ attitude. The utility transformation functions are developed on the decision-makers’ attitude. Secondly, the 2-tuple linguistic operational laws are presented with the extended Hamacher T-norm (TN) and T-conorm (TC). Subsequently, we propose the 2-tuple linguistic utility weighted average (2TLUWA) operator and the method of MADM. Lastly, the application and the comparison with the existing methods are summarized to verify the practicality and advantages of the proposed method of MADM.

scholarly journals Multi-Agent Simulation of Individuals’ Escape in the Urban Rainstorm Context Based on Dynamic Recognition-Primed Decision Model

Water ◽  
2020 ◽  
Vol 12 (4) ◽  
pp. 1190 ◽  
Author(s):  
Qing Yang ◽  
Xu Sun ◽  
Xingxing Liu ◽  
Jinmei Wang
Keyword(s):  
Decision Making ◽  
Time Pressure ◽  
Decision Makers ◽  
Response Strategy ◽  
Limited Information ◽  
Information Gap ◽  
Agent Simulation ◽  
Multi Agent ◽  
Dynamic Recognition ◽  
Classical Decision

The urban rainstorm can evolve into a serious emergency, generally characterized by high complexity, uncertainty, and time pressure. It is often difficult for individuals to find the optimal response strategy due to limited information and time constraints. Therefore, the classical decision-making method based on the “infinite rationality” assumption is sometimes challenging to reflect the reality. Based on the recognition-primed decision (RPD) model, a dynamic RPD (D-RPD) model is proposed in this paper. The D-RPD model assumes that decision-makers can gain experience in the escaping process, and the risk perception of rainstorm disasters can be regarded as a Markov process. The experience of recent attempts would contribute more in decision-making. We design the agent according to the D-RPD model, and employ a multi-agent system (MAS) to simulate individuals’ decisions in the context of a rainstorm. Our results show that experience helps individuals to perform better when they escape in the rainstorm. Recency acts as a one of the key elements in escaping decision making. We also find that filling the information gap between individuals and real-time disaster would help individuals to perform well, especially when individuals tend to avoid extreme decisions.

scholarly journals Non-human primates satisfy utility maximization in compliance with the continuity axiom of Expected Utility Theory

2020 ◽  
Author(s):  
Simone Ferrari-Toniolo ◽  
Philipe M. Bujold ◽  
Fabian Grabenhorst ◽  
Raymundo Báez-Mendoza ◽  
Wolfram Schultz
Keyword(s):  
Expected Utility ◽  
Utility Theory ◽  
Utility Maximization ◽  
Expected Utility Theory ◽  
Decision Makers ◽  
Utility Measure ◽  
Trade Off ◽  
Subjective Value ◽  
Subjective Utility ◽  
Continuity Axiom

ABSTRACTExpected Utility Theory (EUT), the first axiomatic theory of risky choice, describes choices as a utility maximization process: decision makers assign a subjective value (utility) to each choice option and choose the one with the highest utility. The continuity axiom, central to EUT and its modifications, is a necessary and sufficient condition for the definition of numerical utilities. The axiom requires decision makers to be indifferent between a gamble and a specific probabilistic combination of a more preferred and a less preferred gamble. While previous studies demonstrated that monkeys choose according to combinations of objective reward magnitude and probability, a concept-driven experimental approach for assessing the axiomatically defined conditions for maximizing subjective utility by animals is missing. We experimentally tested the continuity axiom for a broad class of gamble types in four male rhesus macaque monkeys, showing that their choice behavior complied with the existence of a numerical utility measure as defined by the economic theory. We used the numerical quantity specified in the continuity axiom to characterize subjective preferences in a magnitude-probability space. This mapping highlighted a trade-off relation between reward magnitudes and probabilities, compatible with the existence of a utility function underlying subjective value computation. These results support the existence of a numerical utility function able to describe choices, allowing for the investigation of the neuronal substrates responsible for coding such rigorously defined quantity.SIGNIFICANCE STATEMENTA common assumption of several economic choice theories is that decisions result from the comparison of subjectively assigned values (utilities). This study demonstrated the compliance of monkey behavior with the continuity axiom of Expected Utility Theory, implying a subjective magnitude-probability trade-off relation which supports the existence of numerical subjective utility directly linked to the theoretical economic framework. We determined a numerical utility measure able to describe choices, which can serve as a correlate for the neuronal activity in the quest for brain structures and mechanisms guiding decisions.

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