Chapter 12: The Critical Decisions Vortex – Interplay of Intuition, Reason, and Emotion: Comparison of Three Dynamic Industries
Jean-Francois Coget The rational decision-making paradigm has dominated research in decision making for years. Rational decision making is typically described as (i) defining a problem, (ii) identifying relevant criteria dimensions of the problem, (iii) weighing the different criteria in terms of importance, (iv) generating alternative solutions that address the problem, (v) rating each alternative on the relevant criteria, and (vi) choosing the optimal solution (Bazerman, 1998; Kahneman et al., 1987; Simon, 1968). Rational decisionmaking models have been widely used in economics, management science, sociology, and political science (March, 1991). One of their main benefits is that they allow researchers to model human behavior with a high degree of mathematical formality. They are at the heart of such popular models as game theory (Von Neuman & Morgenstern, 1944) or expectancy theory (Vroom & McCrimmon, 1968). In spite of their popularity, these models have been criticized for imposing norms such as rationality, conscious and effortful analysis, and choice that individuals often deviate from in practice. Simon’s work (1968), for instance, has demonstrated that cognitive limits make it impossible for people to gather complete information and find the optimal solution to a problem. In practice, their rationality is bounded. Kahneman and Tversky (1979) further showed that individuals rely on heuristics that systematically bias their judgment even when they are not overloaded cognitively. Recently, an alternative model of intuitive decision making has captured the attention of management scholars. It is characterized as a rapid, non-conscious process that produces affectively charged judgments through holistic associations (Dane & Pratt,...
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