Essay on Risk and Rational Decision Process - 598 Words

1. Is a rational decision process likely to produce the best outcomes when a situation is risky or uncertain? Is an intuitive, behavioral process best used under risk or under certainty? Explain. 1. During the rational decision process, I feel that an uncertain situation is better. The decision maker may not know all the alternatives, the risks associated with each, or the consequences of each alternative, however I feel that sometimes when you don’t know all the facts of something that you work harder to try and come up with the best solutions. Not having the answers can allow the decision making process to go many ways. Of course it will probably be harder for everyone to agree on things, seeing as they don’t have and certain answers,†¦show more content†¦I think that everyone wants to follow their own instincts, even if it may not be the best decision. This is why most companies have groups of people that all had to make the decision together. Like I said in question 1, sometimes one person’s intuition is different from the people that they are working with. Of course when using intuition sometimes a person’s rationality and, logic are missing. Using intuition now might seem like a good idea, but sometimes in the long run it can end up in disaster. 3. Reconsider the case presented in question 2. How might the company make use of EMB in making its decision? 3. The company could use EMB by using â€Å"Fact based evidence† to gather all the evidence or facts to help them choose the right product. Instead of using intuition they would use solid facts and evidence that they gathered form learning and experience. They can use their experience to help guide them in the right direction. Choosing the right product should be based off of experience and knowledge. They should look at all of the risks, and draw backs of each product when making the final decision. The company needs to choose the product that will help the company in the long run, and do well in the market. The use to EMB instead of intuition may help then more because they aren’t following there gut instincts, they are making the decision based of cold hardShow MoreRelatedMaps Of Bounded Rationality : Psychology For Behavioural Economics960 Words   |  4 Pagesintuitive thinking and how it guides our decision-making. Although primarily aimed at the field of psycho logy, it is an interdisciplinary article with applications in economic theorising. Kahneman attempts to differentiate between two systems of thought, one of intuition (system 1) and one of reasoning (system 2), and argues that many judgements and choices are made intuitively, rather than with reason (a slower and more deliberate process). 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