DECISION MAKING

Nadir Nazar
Psychology Assignment

10 May 2011
DECISION MAKING

Decision making can be regarded as the mental processes (cognitive process)

resulting in the selection of a course of action among several alternative
scenarios. Every decision making process produces a final choice.[1] The output
can be an action or an opinion of choice.Contents

Table of Contents

1 Overview

2 Problem Analysis vs Decision Making

3 Everyday techniques

4 Decision-Making Stages

5 Decision-Making Steps

6 Cognitive and personal biases

7 Post decision analysis

8 Cognitive styles

8.1 Influence of Briggs Myers type

8.2 Optimizing vs. satisficing

8.3 Combinatoral vs. positional

9 Neuroscience perspective

10 See also

11 References

12 Further reading

13 External links
Overview

Human performance in decision terms has been the subject of active research
from several perspectives. From a psychological perspective, it is necessary to
examine individual decisions in the context of a set of needs, preferences an
individual has and values they seek. From a cognitive perspective, the decision
making process must be regarded as a continuous process integrated in the
interaction with the environment. From a normative perspective, the analysis of
individual decisions is concerned with the logic of decision making and
rationality and the invariant choice it leads to.[2]

Yet, at another level, it might be regarded as a problem solving activity which is

terminated when a satisfactory solution is found. Therefore, decision making is a
reasoning or emotional process which can be rational or irrational, can be based
on explicit assumptions or tacit assumptions.

Logical decision making is an important part of all science-based professions,

where specialists apply their knowledge in a given area to making informed
decisions. For example, medical decision making often involves making a
diagnosis and selecting an appropriate treatment. Some research using
naturalistic methods shows, however, that in situations with higher time
pressure, higher stakes, or increased ambiguities, experts use intuitive decision
making rather than structured approaches, following a recognition primed
decision approach to fit a set of indicators into the expert's experience and
immediately arrive at a satisfactory course of action without weighing
alternatives. Recent robust decision efforts have formally integrated uncertainty
into the decision making process. However, Decision Analysis, recognized and
included uncertainties with a structured and rationally justifiable method of
decision making since its conception in 1964.

A major part of decision making involves the analysis of a finite set of

alternatives described in terms of some evaluative criteria. These criteria may be
benefit or cost in nature. Then the problem might be to rank these alternatives in
terms of how attractive they are to the decision maker(s) when all the criteria
are considered simultaneously. Another goal might be to just find the best
alternative or to determine the relative total priority of each alternative (for
instance, if alternatives represent projects competing for funds) when all the
criteria are considered simultaneously. Solving such problems is the focus of
multi-criteria decision analysis (MCDA) also known as multi-criteria decision
making (MCDM). This area of decision making, although it is very old and has
attracted the interest of many researchers and practitioners, is still highly
debated as there are many MCDA / MCDM methods which may yield very
different results when they are applied on exactly the same data.[3] This leads to
the formulation of a decision making paradox.

Problem Analysis vs Decision Making

It is important to differentiate between problem analysis and decision making.

The concepts are completely separate from one another. Problem analysis must
be done first, then the information gathered in that process may be used towards
decision making.[4]

Problem Analysis

• Analyze performance, what should the results be against what they actually are

• Problems are merely deviations from performance standards

• Problem must be precisely identified and described

• Problems are caused by some change from a distinctive feature

• Something can always be used to distinguish between what has and hasn't been
effected by a cause

• Causes to problems can be deducted from relevant changes found in analyzing

the problem

• Most likely cause to a problem is the one that exactly explains all the facts

Decision Making

• Objectives must first be established

• Objectives must be classified and placed in order of importance

• Alternative actions must be developed

• The alternative must be evaluated against all the objectives

• The alternative that is able to achieve all the objectives is the tentative decision

• The tentative decision is evaluated for more possible consequences

• The decisive actions are taken, and additional actions are taken to prevent any
adverse consequences from becoming problems and starting both systems
(problem analysis and decision making) all over again

Everyday techniques
Some of the decision making techniques people use in everyday life include:

Pros and Cons: Listing the advantages and disadvantages of each option,
popularized by Plato and Benjamin Franklin

Simple Prioritization: Choosing the alternative with the highest probability-

weighted utility for each alternative (see Decision Analysis) or derivative
Possibilianism: Acting on choices so as not to preclude alternative
understandings of equal probability, including active exploration of novel
possibilities and emphasis on the necessity of holding multiple positions at once
if there is no available data to privilege one over the others.

Satisficing: Accepting the first option that seems like it might achieve the desired
result

Acquiesce to a person in authority or an "expert", just following orders

Flipism: Flipping a coin, cutting a deck of playing cards, and other random or
coincidence methods

Prayer, tarot cards, astrology, augurs, revelation, or other forms of divination

Decision-Making Stages

Developed by B. Aubrey Fisher, there are four stages that should be involved in
all group decision making. These stages, or sometimes called phases, are
important for the decision-making process to begin

Orientation stage- This phase is where members meet for the first time and start
to get to know each other.

Conflict stage- Once group members become familiar with each other, disputes,
little fights and arguments occur. Group members eventually work it out.

Emergence stage- The group begins to clear up vague opinions by talking about
them.

Reinforcement stage- Members finally make a decision, while justifying

themselves that it was the right decision.

Decision-Making Steps
When in an organization and faced with a difficult decision, there are several
steps one can take to ensure the best possible solutions will be decided. These
steps are put into seven effective ways to go about this decision making process
(McMahon 2007).

The first step - Outline your goal and outcome. This will enable decision makers
to see exactly what they are trying to accomplish and keep them on a specific
path.

The second step - Gather data. This will help decision makers have actual
evidence to help them come up with a solution.

The third step - Brainstorm to develop alternatives. Coming up with more than
one solution ables you to see which one can actually work.

The fourth step - List pros and cons of each alternative. With the list of pros and
cons, you can eliminate the solutions that have more cons than pros, making
your decision easier.

The fifth step - Make the decision. Once you analyze each solution, you should
pick the one that has many pros (or the pros that are most significant), and is a
solution that everyone can agree with.

The sixth step - Immediately take action. Once the decision is picked, you should
implement it right away.

The seventh step - Learn from, and reflect on the decision making. This step
allows you to see what you did right and wrong when coming up, and putting the
decision to use.

Cognitive and personal biases

Biases can creep into our decision making processes. Many different people have
made a decision about the same question (e.g. "Should I have a doctor look at this
troubling breast cancer symptom I've discovered?" "Why did I ignore the
evidence that the project was going over budget?") and then craft potential
cognitive interventions aimed at improving decision making outcomes.
Below is a list of some of the more commonly debated cognitive biases.

Selective search for evidence (a.k.a. Confirmation bias in psychology) (Scott

Plous, 1993) – We tend to be willing to gather facts that support certain
conclusions but disregard other facts that support different conclusions.
Individuals who are highly defensive in this manner show significantly greater
left prefrontal cortex activity as measured by EEG than do less defensive
individuals.[5]

Premature termination of search for evidence – We tend to accept the first

alternative that looks like it might work.

Inertia – Unwillingness to change thought patterns that we have used in the past
in the face of new circumstances.

Selective perception – We actively screen-out information that we do not think is

important. (See prejudice.) In one demonstration of this effect, discounting of
arguments with which one disagrees (by judging them as untrue or irrelevant)
was decreased by selective activation of right prefrontal cortex.[6]

Wishful thinking or optimism bias – We tend to want to see things in a positive

light and this can distort our perception and thinking.[7]

Choice-supportive bias occurs when we distort our memories of chosen and

rejected options to make the chosen options seem more attractive.

Recency – We tend to place more attention on more recent information and

either ignore or forget more distant information. (See semantic priming.) The
opposite effect in the first set of data or other information is termed Primacy
effect (Plous, 1993).

Repetition bias – A willingness to believe what we have been told most often and
by the greatest number of different sources.

Anchoring and adjustment – Decisions are unduly influenced by initial

information that shapes our view of subsequent information.

Group think – Peer pressure to conform to the opinions held by the group.

Source credibility bias – We reject something if we have a bias against the

person, organization, or group to which the person belongs: We are inclined to
accept a statement by someone we like. (See prejudice.)

Incremental decision making and escalating commitment – We look at a decision

as a small step in a process and this tends to perpetuate a series of similar
decisions. This can be contrasted with zero-based decision making. (See slippery
slope.)

Attribution asymmetry – We tend to attribute our success to our abilities and

talents, but we attribute our failures to bad luck and external factors. We
attribute other's success to good luck, and their failures to their mistakes.
Role fulfillment (Self Fulfilling Prophecy) – We conform to the decision making
expectations that others have of someone in our position.

Underestimating uncertainty and the illusion of control – We tend to

underestimate future uncertainty because we tend to believe we have more
control over events than we really do. We believe we have control to minimize
potential problems in our decisions.

Reference class forecasting was developed to eliminate or reduce cognitive

biases in decision making.

Post decision analysis

Evaluation and analysis of past decisions is complementary to decision making;

see also mental accounting.

Cognitive styles

Influence of Briggs Myers type

According to behavioralist Isabel Briggs Myers, a person's decision making

process depends to a significant degree on their cognitive style.[8] Myers
developed a set of four bi-polar dimensions, called the Myers-Briggs Type
Indicator (MBTI). The terminal points on these dimensions are: thinking and
feeling; extroversion and introversion; judgment and perception; and sensing
and intuition. She claimed that a person's decision making style correlates well
with how they score on these four dimensions. For example, someone who
scored near the thinking, extroversion, sensing, and judgment ends of the
dimensions would tend to have a logical, analytical, objective, critical, and
empirical decision making style. However, some psychologists say that the MBTI
lacks reliability and validity and is poorly constructed.

Other studies suggest that these national or cross-cultural differences exist

across entire societies. For example, Maris Martinsons has found that American,
Japanese and Chinese business leaders each exhibit a distinctive national style of
decision making.[9]

Optimizing vs. satisficing

Herbert Simon coined the phrase "bounded rationality" to express the idea that
human decision-making is limited by available information, available time, and
the information-processing ability of the mind. Simon also defined two cognitive
styles: maximizers try to make an optimal decision, whereas satisficers simply
try to find a solution that is "good enough". Maximizers tend to take longer
making decisions due to the need to maximize performance across all variables
and make tradeoffs carefully; they also tend to more often regret their decisions.
[10]

Combinatoral vs. positional

Styles and methods of decision making were elaborated by the founder of

Predispositioning Theory, Aron Katsenelinboigen. In his analysis on styles and
methods Katsenelinboigen referred to the game of chess, saying that “chess does
disclose various methods of operation, notably the creation of predisposition—
methods which may be applicable to other, more complex systems.”[11]

In his book Katsenelinboigen states that apart from the methods (reactive and
selective) and sub-methods (randomization, predispositioning, programming),
there are two major styles – positional and combinational. Both styles are
utilized in the game of chess. According to Katsenelinboigen, the two styles
reflect two basic approaches to the uncertainty: deterministic (combinational
style) and indeterministic (positional style). Katsenelinboigen’s definition of the
two styles are the following.

The combinational style is characterized by

a very narrow, clearly defined, primarily material goal, and

a program that links the initial position with the final outcome.

In defining the combinational style in chess, Katsenelinboigen writes:

The combinational style features a clearly formulated limited objective, namely

the capture of material (the main constituent element of a chess position). The
objective is implemented via a well-defined and in some cases in a unique
sequence of moves aimed at reaching the set goal. As a rule, this sequence leaves
no options for the opponent. Finding a combinational objective allows the player
to focus all his energies on efficient execution, that is, the player’s analysis may
be limited to the pieces directly partaking in the combination. This approach is
the crux of the combination and the combinational style of play.[11]

The positional style is distinguished by

a positional goal and

a formation of semi-complete linkages between the initial step and final
outcome.

“Unlike the combinational player, the positional player is occupied, first and
foremost, with the elaboration of the position that will allow him to develop in
the unknown future. In playing the positional style, the player must evaluate
relational and material parameters as independent variables. ( … ) The positional
style gives the player the opportunity to develop a position until it becomes
pregnant with a combination. However, the combination is not the final goal of
the positional player—it helps him to achieve the desirable, keeping in mind a
predisposition for the future development. The Pyrrhic victory is the best
example of one’s inability to think positionally.”[12]

The positional style serves to

a) create a predisposition to the future development of the position;

b) induce the environment in a certain way;

c) absorb an unexpected outcome in one’s favor;

d) avoid the negative aspects of unexpected outcomes.

The positional style gives the player the opportunity to develop a position until it
becomes pregnant with a combination. Katsenelinboigen writes:

“As the game progressed and defense became more sophisticated the
combinational style of play declined. . . . The positional style of chess does not
eliminate the combinational one with its attempt to see the entire program of
action in advance. The positional style merely prepares the transformation to a
combination when the latter becomes feasible.”[13]

Neuroscience perspective

The anterior cingulate cortex (ACC), orbitofrontal cortex (and the overlapping
ventromedial prefrontal cortex) are brain regions involved in decision making
processes. A recent neuroimaging study,[14] found distinctive patterns of neural
activation in these regions depending on whether decisions were made on the
basis of personal volition or following directions from someone else. Patients
with damage to the ventromedial prefrontal cortex have difficulty making
advantageous decisions.[15]
A recent study[16] involving Rhesus monkeys found that neurons in the parietal
cortex not only represent the formation of a decision but also signal the degree of
certainty (or "confidence") associated with the decision. Another recent
study[17] found that lesions to the ACC in the macaque resulted in impaired
decision making in the long run of reinforcement guided tasks suggesting that
the ACC may be involved in evaluating past reinforcement information and
guiding future action.

Emotion appears to aid the decision making process: Decision making often
occurs in the face of uncertainty about whether one's choices will lead to benefit
or harm (see also Risk). The somatic-marker hypothesis is a neurobiological
theory of how decisions are made in the face of uncertain outcome. This theory
holds that such decisions are aided by emotions, in the form of bodily states, that
are elicited during the deliberation of future consequences and that mark
different options for behavior as being advantageous or disadvantageous. This
process involves an interplay between neural systems that elicit
emotional/bodily states and neural systems that map these emotional/bodily
states.[18]

Although it is unclear whether the studies generalize to all processing, there is

evidence that volitional movements are initiated, not by the conscious decision
making self, but by the subconscious. See the Neuroscience of free will.

References

^ James Reason (1990). Human Error. Ashgate. ISBN 1840141042.

^ Daniel Kahneman, Amos Tversky (2000). Choice, Values, Frames. The

Cambridge University Press. ISBN 0521621720.
^ Triantaphyllou, E. (2000). Multi-Criteria Decision Making: A Comparative Study
(http://www.csc.lsu.edu/trianta/Books/DecisionMaking1/Book1.htm) .
Dordrecht, The Netherlands: Kluwer Academic Publishers (now Springer). pp.
320. ISBN 0792366077.

^ Charles H. Kepner, Benjamin B. Tregoe (1965). The Rational Manager: A

Systematic Approach to Problem Solving and Decision-Making. McGraw-Hill,
June 1965

^ Blackhart, G. C., & Kline, J. P. (2005). Individual differences in anterior EEG

asymmetry between high and low defensive individuals during a
rumination/distraction task. Personality and Individual Differences, 39, 427–
437.

^ Drake, R. A. (1993). Processing persuasive arguments: 2. Discounting of truth

and relevance as a function of agreement and manipulated activation
asymmetry. Journal of Research in Personality, 27, 184–196.
^ Chua, E. F., Rand-Giovannetti, E., Schacter, D. L., Albert, M., & Sperling, R. A.
(2004). Dissociating confidence and accuracy: Functional magnetic resonance
imaging shows origins of the subjective memory experience. Journal of Cognitive
Neuroscience, 16, 1131–1142.

^ Isabel Briggs Myers|Myers, I. (1962) Introduction to Type: A description of the

theory and applications of the Myers-Briggs type indicator, Consulting
Psychologists Press, Palo Alto Ca., 1962.

^ Martinsons, Maris G., Comparing the Decision Styles of American, Chinese and
Japanese Business Leaders. Best Paper Proceedings of Academy of Management
Meetings, Washington, DC, August 2001 [1]
(http://papers.ssrn.com/sol3/papers.cfm?abstract_id=952292)

^ http://www.pri.org/science/science-behind-making-decisions1407.html

^ a b Katsenelinboigen, Aron. The Concept of Indeterminism and Its Applications:

Economics, Social Systems, Ethics, Artificial Intelligence, and Aesthetics Praeger:
Westport, Connecticut, 1997, p.6)

^ V. Ulea, The Concept of Dramatic Genre and The Comedy of A New Type. Chess,
Literature, and Film. Southern Illinois University Press, 2002, pp. 17–18)

^ Selected Topics in Indeterministic Systems Intersystems Publications:

California, 1989, p. 21

^ Interactions between decision making and performance monitoring within

prefrontal cortex (http://www.nature.com/cgi-taf/DynaPage.taf?
file=/neuro/journal/v7/n11/abs/nn1339.html)

^ Damasio, AR (1994). Descarte's Error: Emotion, reason and the human brain.
New York: Picador. ISBN 0333656563.

^ Roozbeh Kiani and Michael N. Shadlen, Representation of Confidence

Associated with a Decision by Neurons in the Parietal Cortex
(http://www.sciencemag.org/cgi/content/abstract/324/5928/759)

^ Kennerly, et al. (2006)

(http://www.nature.com/neuro/journal/v9/n7/abs/nn1724.html)

^ Nasir Naqvi, et al. "The Role of Emotion in Decision Making: A Cognitive

Neuroscience Perspective (http://www.blackwell-
synergy.com/doi/abs/10.1111/j.1467-8721.2006.00448.x?
cookieSet=1&journalCode=cdir) ", Current Directions in Psychological Science,
doi:10.1111/j.1467-8721.2006.00448.x (http://dx.doi.org/10.1111%2Fj.1467-
8721.2006.00448.x)

Further reading

Kattan, M. (ed.) Encyclopedia of Medical Decision Making, Thousand Oaks: Sage,

2009.
Facione, P. and Facione, N., Thinking and Reasoning in Human Decision Making,
The California Academic Press / Insight Assessment, 2007

Lauwereyns, Jan (February 2010). The Anatomy of Bias: How Neural Circuits
Weigh the Options (http://mitpress.mit.edu/9780262123105) . Cambridge, MA:
The MIT Press. ISBN 026212310X.

Levin, Mark Sh., Composite Systems Decisions, New York: Springer, 2006.

Plous, S. The Psychology of Judgement and Decision Making New York: McGraw-
Hill, 1993

Ullman, D. G., Making Robust Decisions Trafford, 2006

The de Borda Institute (http://www.deborda.org) – Emerson, P J. Beyond the

Tyranny of the Majority, a comparison of the more common voting procedures
used in both decision making and elections.

Decision Analysis in Health Care

(http://gunston.gmu.edu/healthscience/730/default.asp) – An online course
from George Mason University providing free lectures and tools for decision
making in health care.