Abstract
In this chapter, the way people consider possibilities in decision making are unpacked and explored. It begins by outlining the concept of rational choice – what a decision maker ought to choose. Specifically, it discusses how, for a given decision, a rational choice can (or cannot) be determined. Whether people often make rational choices, and what can be done to shift people toward making rational choices more often. The chapter also portrays decision making in a human light: explaining how defining a rational choice and the decision process are constrained by human biology and behavior. The steps required to make a decision are delineated, and at each step, it is briefly discussed when and how people can diverge from what they ought to be doing or choosing. The chapter closes by discussing how people evaluate decisions after they have made them and the factors that affect the evaluation.
This is a preview of subscription content, log in via an institution to check access.
Access this chapter
Tax calculation will be finalised at checkout
Purchases are for personal use only
References
Alchian, A. (1968). Cost. In International encyclopedia of the social sciences (Vol. 3, pp. 404–415). New York: Macmillan.
Arkes, H. R., & Blumer, C. (1985). The psychology of sunk cost. Organizational Behavior and Human Decision Processes, 35(1), 124–140. https://doi.org/10.1016/0749-5978(85)90049-4.
Begg, D., Vernasca, G., Fischer, S., & Dornbush, R. (2014). Economics (11th ed.). Maidenhead: McGraw-Hill Education.
Decision. (2020). In Merriam-Webster.com. https://www.merriam-webster.com/dictionary/decision
Domurat, A., Kowalczuk, O., Idzikowska, K., Borzymowska, Z., & Nowak-Przygodzka, M. (2015). Bayesian probability estimates are not necessary to make choices satisfying Bayes’ rule in elementary situations. Frontiers in Psychology, 6. https://doi.org/10.3389/fpsyg.2015.01194.
Ellsberg, D. (1961). Risk, ambiguity, and the savage axioms. The Quarterly Journal of Economics, 75(4), 643. https://doi.org/10.2307/1884324.
Evans, J. S. B. T., & Over, D. E. (1996). Rationality and reasoning. (pp. xi, 179). London: Psychology/Erlbaum (UK) Taylor & Fr.
Fischhoff, B. (1975). Hindsight is not equal to foresight: The effect of outcome knowledge on judgment under uncertainty. Journal of Experimental Psychology: Human Perception and Performance, 1(3), 288–299. https://doi.org/10.1037/0096-1523.1.3.288.
Fischhoff, B. (2012). Judgment and decision making. New York: Earthscan.
Fiske, S. T., & Taylor, S. E. (1991). Social cognition. New York: McGraw-Hill.
Frederick, S., & Loewenstein, G. (1999). Hedonic adaptation. In Well-being: The foundations of hedonic psychology (pp. 302–329). New York: Russell Sage Foundation.
Frijda, N. H. (2007). The laws of emotion. Mahwah, NJ: Lawrence Erlbaum Associates.
Hardman, D. (2009). Judgment and decision making. Chichester, UK: Wiley-Blackwell.
Hastie, R. (2001). Problems for judgment and decision making. Annual Review of Psychology, 52(1), 653–683. https://doi.org/10.1146/annurev.psych.52.1.653.
Johnson-Laird, P. N. (2012). Inference with mental models. In K. J. Holyoak & R. G. Morrison (Eds.), The Oxford handbook of thinking and reasoning (pp. 134–145). Oxford: Oxford University Press.
Jost, J. T., Banaji, M. R., & Nosek, B. A. (2004). A decade of system justification theory: Accumulated evidence of conscious and unconscious bolstering of the status quo. Political Psychology, 25(6), 881–919. https://doi.org/10.1111/j.1467-9221.2004.00402.x.
Keeney, R. L., & Raiffa, H. (1993). Decisions with multiple objectives: Preferences and value tradeoffs. Cambridge, UK: Cambridge University Press.
Kerr, N. L., & Tindale, R. S. (2004). Group performance and decision making. Annual Review of Psychology, 55(1), 623–655. https://doi.org/10.1146/annurev.psych.55.090902.142009.
Klein, O., Hegarty, P., & Fischhoff, B. (2017). Hindsight 40 years on: An interview with Baruch Fischhoff. Memory Studies, 10(3), 249–260. https://doi.org/10.1177/1750698017701606.
Larrick, R. P. (2004). Debiasing. In D. J. Koehler & N. Harvey (Eds.), Blackwell handbook of judgment and decision making (pp. 316–338). Oxford, UK: Blackwell Publishing Ltd. https://doi.org/10.1002/9780470752937.ch16.
Lenstra, J. K., & Kan, A. H. G. R. (1975). Some simple applications of the travelling salesman problem. Journal of the Operational Research Society, 26(4), 717–733. https://doi.org/10.1057/jors.1975.151.
Luce, R. D., & Raiffa, H. (1957). Games and decisions: Introduction and critical survey (pp. xix, 509). New York: Wiley.
Mayor, M. (Ed.). (2011). Longman dictionary of contemporary English: DCE new edition for advanced learners (5 ed., 5. printing). London, UK: Pearson Longman.
Meyers, E. A., Białek, M., Fugelsang, J. A., Koehler, D. J., & Friedman, O. (2019). Wronging past rights: The sunk cost bias distorts moral judgment. Judgment and Decision making, 14(6), 721–727.
Michailova, J., Tyszka, T., & Pfeifer, K. (2017). Are people interested in probabilities of natural disasters?: Are people interested in probabilities of natural disasters? Risk Analysis, 37(5), 1005–1017. https://doi.org/10.1111/risa.12685.
Niszczota, P., & Białek, M. (2020). Women oppose sin stocks more than men do. Finance Research Letters, 101803. https://doi.org/10.1016/j.frl.2020.101803.
Payne, J. W., Bettman, J. R., & Johnson, E. J. (1993). The adaptive decision maker. Cambridge, UK: Cambridge University Press.
Redelmeier, D. A., & Shafir, E. (2020). Pitfalls of judgment during the COVID-19 pandemic. The Lancet Public Health, 5(6), e306–e308. https://doi.org/10.1016/S2468-2667(20)30096-7.
Ritov, I., & Baron, J. (1990). Reluctance to vaccinate: Omission bias & ambiguity. Journal of Behavioral Decision, 3(4), 263–277.
Royzman, E. B., & Baron, J. (2002). The preference for indirect harm. Social Justice Research, 15(2), 165–184.
Savage, L. J. (1954). The foundations of statistics. New York: Wiley.
Simon, H. A. (1959). Theories of decision-making in economics and behavioral science. The American Economic Review, 49(3), 253–283.
Spranca, M., Minsk, E., & Baron, J. (1991). Omission and commission in judgment and choice. Journal of Experimental Social Psychology, 27(1), 76–105. https://doi.org/10.1016/0022-1031(91)90011-T.
Stanovich, K. E. (2009). What intelligence tests miss: The psychology of rational thought. New Haven, CT: Yale University Press.
Stanovich, K. E. (2018). Miserliness in human cognition: The interaction of detection, override and mindware. Thinking & Reasoning, 24(4), 423–444.
Stanovich, K. E. (2020). Why humans are cognitive misers and what it means for the great rationality debate. In R. Viale (Ed.), Routledge handbook of bounded rationality (1st ed., pp. 196–206). New York: Taylor & Francis Group.
Surowiecki, J. (2004). The wisdom of crowds: Why the many are smarter than the few and how collective wisdom shapes business, economies, societies, and nations (1st ed). New York: Doubleday & Co.
Thaler, R. H., & Sunstein, C. (2008). Nudge: Improving Decisions about Health, Wealth, and Happiness. New Haven, CT: Yale University Press.
Todd, P. M., & Gigerenzer, G. (2012). Ecological rationality: Intelligence in the world. New York: Oxford University Press.
Turpin, M. H., Meyers, E. A., Fugelsang, J. A., Friedman, O., & Białek, M. (2019). Sunk cost bias and withdrawal aversion. The American Journal of Bioethics, 19(3), 57–59. https://doi.org/10.1080/15265161.2018.1563653.
Tversky, A. (1972). Elimination by aspects: A theory of choice. Psychological Review, 79(4), 281–299. https://doi.org/10.1037/h0032955.
Tversky, A., & Kahneman, D. (1981). The framing of decisions and the psychology of choice. Science, 211(4481), 453–458.
Von Neumann, J., & Morgenstern, O. (1944). Theory of games and economic behavior. (pp. xviii, 625). Princeton, NJ: Princeton University Press.
Waldmann, M. R., Wiegmann, A., & Nagel, J. (2017). Causal models mediate moral inferences. In Moral inferences (pp. 37–55). New York: Routledge.
Wilkinson, D., Butcherine, E., & Savulescu, J. (2019). Withdrawal aversion and the equivalence test. The American Journal of Bioethics, 19(3), 21–28. https://doi.org/10.1080/15265161.2019.1574465.
Wilson, T. D., & Gilbert, D. T. (2005). Affective forecasting: Knowing what to want. Current Directions in Psychological Science, 14(3), 131–134. https://doi.org/10.1111/j.0963-7214.2005.00355.x.
Author information
Authors and Affiliations
Editor information
Editors and Affiliations
Section Editor information
Rights and permissions
Copyright information
© 2022 Springer Nature Switzerland AG
About this entry
Cite this entry
Białek, M., Domurat, A., Meyers, E.A. (2022). Decision-Making. In: Glăveanu, V.P. (eds) The Palgrave Encyclopedia of the Possible. Palgrave Macmillan, Cham. https://doi.org/10.1007/978-3-030-90913-0_157
Download citation
DOI: https://doi.org/10.1007/978-3-030-90913-0_157
Published:
Publisher Name: Palgrave Macmillan, Cham
Print ISBN: 978-3-030-90912-3
Online ISBN: 978-3-030-90913-0
eBook Packages: Behavioral Science and PsychologyReference Module Humanities and Social SciencesReference Module Business, Economics and Social Sciences