which of these assumptions are made in the rational model of decision making?
LectureNotes asked which assumptions are made in the rational model of decision making.
In the rational model of decision making, several assumptions are made:
1. Complete information: The model assumes that the decision maker has full and accurate information about all available alternatives. This means that they are aware of all possible choices, their potential outcomes, and the probabilities associated with each outcome. However, in reality, it is often difficult to gather all the necessary information, and decision makers may have to rely on incomplete or ambiguous information.
2. Clear preferences: The rational model assumes that decision makers have well-defined and consistent preferences. They are assumed to be able to rank alternatives based on their preferences and make decisions solely based on these preferences. However, in practice, people’s preferences may be subjective, influenced by emotions, biases, or other external factors.
3. Value maximization: The rational model assumes that decision makers are rational actors who aim to maximize their utility or objective function. They make decisions by evaluating and comparing the expected outcomes of each alternative, weighing the costs and benefits, and selecting the option that yields the highest utility. However, individuals may not always act in a perfectly rational manner and may consider other factors such as personal values, ethics, or social norms.
4. Consistent decision criteria: The rational model assumes that decision makers use consistent decision criteria to evaluate alternatives. They evaluate each option based on the same set of criteria and weigh the importance of each criterion consistently. However, decision makers may use different criteria based on the context, preferences, or other situational factors.
5. Optimality: The rational model assumes that decision makers are capable of identifying the optimal solution that maximizes their objective function. They carefully calculate and analyze all available alternatives and select the one that provides the highest expected utility. However, finding the optimal solution may not always be feasible or practical due to constraints, uncertainties, or limited resources.
It is important to note that while the rational model provides a structured framework for decision making, it may not fully capture the complexity and nuances of real-world decision-making processes. People often rely on heuristics, intuition, and bounded rationality rather than following the idealized rational decision-making model.