Glossary
Decision Making
What is decision making?
Decision making is choosing among alternatives. It can involve an individual selecting a product, a team deciding how to work, or an organization setting a policy. Goals, values, beliefs, available information, and constraints all affect what a useful choice looks like.
Types of decision making
Rational or deliberative decision making
A structured approach defines the problem, identifies options, compares their consequences, and selects an option using explicit criteria. It can make the reasoning easier to inspect. It does not guarantee that the information or criteria are right.
Intuitive decision making
An intuitive judgment can arise quickly from learned patterns, without a person being able to explain every step. Kahneman and Klein argue that skilled intuition needs valid cues and enough opportunity to learn from them. Confidence, experience, or an ambiguous situation alone does not make an intuition reliable.
Biased decision making
A judgment can show a systematic error relative to an appropriate standard. Confirmation bias, for example, concerns favoring information that supports an existing view. Naming a possible bias does not establish that it caused a particular decision. Deliberate and intuitive judgments can both be useful or mistaken.
The Science of Decision Making and Behavioral Design
Behavioral science studies how people choose; behavioral design uses such knowledge when organizing products, services, and environments. Applications include health, education, and financial decisions, though an intervention must still be tested to find out whether it works.
A designer might change a default or how alternatives are compared. The relevant question is whether that change helps people achieve their actual goals. More acceptance of the preferred option is not, by itself, a better outcome for the person choosing.
Models and theories of decision making
Expected utility theory
Expected utility theory evaluates options using the utilities of possible outcomes, weighted by their probabilities. It can serve as a normative model under specified assumptions; it does not claim that people always choose this way.
Prospect theory
Prospect theory models risky choices using gains and losses relative to a reference point, with decision weights that can differ from objective probabilities. It describes important patterns under risk, rather than every kind of decision.
Limits and evaluation
A bad outcome does not necessarily mean a bad decision. Assess the goal, information available at the time, alternatives, and constraints. A choice made under uncertainty can be reasonable and still turn out badly.