A PRIMER ON DECISION MAKING

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A PRIMER ON DECISION MAKING

• How Decision happen
• James G. March
• Eglantina Bushgjokaj

2
Rational Calculation

• Pure rationality
• - Knowledge , Actors , Preferences Decision
  rule
• Limited rationality
• - Problems of attention, memory
  ,comprehension communication .
• Decision are made based on preference.
• Risk taking behaviors.
• In general reliability increases with education
  experience , decreased with the organizational
  size.
• Instead of calculating the best possible
  action they search for an action that is good
  enough

3
Rule followers

• Recognition
• Identity
• Rules
• Multiple identities multiple rules
• Four mechanisms
• Experimental learning. Individuals learn to evoke
  or not to.
• Categorization competition or themselves
• recency .An executive that carries his role all
  day long will carry that role at home too.
• Context of others.
• Language as Doctor, Mr.President.
• Rules and Environment adapt to each other by
  means of several intertwined processes
• 1.Analysis
• 2.Bargaining .3 Imitation 4. selection 5.
  Learning.
• In a learning process rules change .In a
  selection process , the rules themselves do not
  change, but the mix of rules does.

4
The experimental learning cycle

• Rules Interpretation
• Action Outcomes
• ___________________________
• Aspiration , Diffusion Legitimacy

5
Teams Partners

• Individuals Groups Organizations preferences
  identities are
• inconsistent .
• First stage bargaining, negotiation, policy
  making, politics a team formed.
• Second stage the differentiation between
  politics and administration.
• Action- Beliefs - Trust Loyalty Attention
• Aligning Identities and rules , Selection
  ,Socialization ,Attention and Interpretation.

6
Conflicts Politics

• Power as tautology is positional behavioral ,
  is domain specific, actors have to be activated,
  power is wasted.
• The symbolic significance talking about power
• Control over rules , resources,, preferences and
  identities.
• Policy Logrolls as coalitions .A logroll is a
  coalition of individuals who are largely
  indifferent to each- other demands but agree to
  support each other so they can have what they
  wants.
• Personal consequences
• Social benefits
• Creating communities
• Standard advice for becoming powerful become
  rich, seize a hostage , built a better mouse trap
  .Have controls over preferences and identities.

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Ambiguity Interpretation

• 1-reality 2 casualty 3 intentionally
• Studies of interpretation
• Belief conservation
• Event certainty
• Anthropocentric focus ( events to the action
  wills of human being)
• Bold (foolish )
  careful (timid)
• fresh( naïve)
  sophisticated( cynical)
• -Power story , personality story , utility story
  ,culture story
• Inconsistent Interpretation
• Decision and implementation
• Why some people are rich other people are poor?
  

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Garbage can process

• Contract meetings, budget committees
  compensation decisions.
• 1 Problem activity.
• 2 Problem latency , issues that are not linked to
  choices
• 3 Decision time
• it is interactive.
• Unrestricted
• Temporal sorting
• How does a mother knows what it means to act as a
  mother?
• Ambiguities of identities
• Gender as identity

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Decision Engineering

• Outcome
• Processes
• Symbolic significance of Decision making can be
  seen as a corruption
• Developing myths interpretation of life, as
  modifying the diffuse beliefs and cultural
  understanding that makes events comprehensible.
• The object of decision making is to improve
  human commitment to rationality identity

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• Apostles of Reckoning
• Students of decision making their beliefs are
  the world resources are fixed. It is a
  conservation of symbolic and substantive assets.
• Apostles of progress
• Their believes are the worlds resources are
  expandable .By inventions and exchanges every one
  is better off. Symbolic and substantive assets
  can be augmented.
• Adapting Inefficiencies
• Lag in matching. Adaptation will be fast to
  improve the match .
• Multiple equilibra
• Networks of diffusion . The information gathered
  from network.
• Mutual adaptation. Stable outcomes that are
  predicted before.
• Ecologies of adaptation.

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• Experience
• Rich histories
• Multiple observers and multiple interpretations
• Hypothetical histories.
• Ambiguity of information
• Profiting from ideas of others, rules , matching
  situations
• Knowledge substitute, gained from different
  experiences
• Politics of knowledge
• Language and symbols
• Engineering problem is suggesting these
• 1 . Treat the self as hypothesis
• 2 . Treat intuition as real
• 3 . Treat hypocrisy as transition
• 4 . Treat memory as an enemy
• 5 . Treat experience as a theory .

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Comments

• An extraordinary rich clear analysis by the
  leading scholar in the field. This book will not
  only become a standard reader in courses of
  decision theory but will serve as an introduction
  to many related areas.
• -Nils Brunson Professor of Management
  ,Stockholm Schools of Economics
• 
  Thank you !