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Psychological variants of decision making

Lecture



The study of individual differences in decision-making is especially relevant in those cases when the DM makes not one, but many managerial decisions affecting the most diverse aspects of production and economic activity and the life of the performers.

1

Note!

The individual psychological characteristics of the DM, the dominant traits of his personality, determine the personal profile of the decision being made — that style, that variant of decision-making, which reflects the personal characteristics of the DM.

Among the most clearly expressed are the following types of personal decision profiles .

The managerial-type decision variant — a decision variant in which the DM proceeds to choose an alternative — the final decision variant, with an initial idea already formulated for himself, which is the result of a preliminary analysis of the conditions and requirements of the task at hand. A decision made on the basis of this personal profile is called a "managerial-type decision." At the same time, both the proposing of hypotheses and their verification are equally significant for the DM. It is precisely for this reason that the practice of making such decisions is the most balanced and well-founded. DMs who make managerial-type decisions are characterized by the following: they rely on sober calculation, and therefore their decisions are effective.

The impulsive decision variant — a decision variant in which the process of constructing hypotheses sharply prevails over the actions of verifying and refining them. In this case, the DM generates ideas relatively easily, but cares little about their evaluation. This leads to the fact that the decision-making process itself proceeds in a jumpy manner and without a proper stage of justification and verification. A decision made on the basis of this personal profile is called an "impulsive decision," which, as practice shows, is often insufficiently thought out and justified. DMs who make impulsive decisions are characterized by the following: they are oriented toward success and are less sensitive to failures.

The inert decision variant — a decision variant that, as a rule, is a manifestation of an uncertain and cautious search for an acceptable decision. After the initial hypothesis appears, its refinement proceeds extremely slowly. The evaluations of hypotheses are overly critical, and the DM checks every step of his repeatedly. A decision made on the basis of this personal profile is called an "inert decision," and the result of it is a lengthening, a stretching out of the time of the decision-making process. DMs who make inert decisions are characterized by the following: they are cautious and afraid of incorrect decisions.

The risky decision variant — a decision variant in which the DM evaluates and justifies the hypotheses being made only after a certain non-fulfillment of the hypothesis put forward is discovered. This variant is close to the impulsive decision variant, when verification of hypotheses is practically absent altogether. A decision made on the basis of this personal profile is called a "risky decision." Note that, although belatedly, the DM does balance the importance of constructing hypotheses and verifying them. DMs who make risky decisions are characterized by the following: they are not afraid to take risks, they believe in luck, and their decisions are ultimately well-founded.

The cautious-type decision variant — a decision variant characterized by particular thoroughness of hypothesis evaluation and criticality. Before reaching a conclusion, the DM performs a great many diverse preparatory actions. A decision made on the basis of this personal profile is called a "cautious decision," for the making of which anticipatory evaluation is characteristic. Cautious people are more sensitive to the negative consequences of their actions than to the positive ones. They are more frightened by mistakes than pleased by successes. Therefore, their behavior is characterized by the following: they are very sensitive to failures, and therefore strive to avoid mistakes.

Note!

The personal profile of the decision being made is influenced by the value orientations of the DM.

Psychological decision-making variants influence the choice of rules of preference among alternatives and therefore have an effect on the quality of the choice of the final alternative.

Certain decision-making conditions can determine special aspects of the psychological behavior of people in making decisions, therefore, in addition to the two named concepts of the psychological behavior of people in decision-making, other concepts corresponding to special decision-making conditions can also be distinguished.

An example of distinguishing a special concept of the psychological behavior of people in decision-making is taking into account the following special conditions for choosing the final alternative — decision-making under conditions of risk. The study of the fact of decision-making under conditions of risk led to the formation, in 1979, of the special concept of "prospect theory," whose authors are D. Kahneman and A. Tversky .

It is based on the following aspects of the psychological behavior of people when making decisions under conditions of risk:

  • • most people attach greater importance to losses than to gains, even if their magnitude is the same. In other words, losses always seem more significant than gains — the loss of 2000 rubles usually upsets a person more than finding 2000 rubles pleases him. This aspect of the psychological behavior of people in making decisions under conditions of risk singles out the following criterion as a priority — loss minimization. This means that under conditions of risk, when making decisions, the criterion of minimizing the losses associated with implementing an alternative is used more often than the criterion of maximizing the income associated with implementing it;
  • • people's attitude toward risk depends on the formulation of the choice problem — people usually avoid risk in order to obtain a guaranteed gain, and prefer risk in order to avoid a guaranteed loss. This aspect of the psychological behavior of people in decision-making under conditions of risk determines the following possible rules of preference among alternatives:
    • — alternative A is more preferable than alternative B if its implementation guarantees obtaining a certain income (gain), while obtaining income under alternative B is of a probabilistic nature (the gain either will or will not occur);
    • — alternative A is more preferable than alternative B if, when implementing alternative A, the occurrence of losses is of a probabilistic nature, while when implementing alternative B, losses are guaranteed;
  • • people tend to overestimate small probabilities, but underestimate medium and large probabilities of achieving results that are significant to them. This aspect of people's psychological behavior determines a phenomenon in which the discrepancy between the actual results of an alternative's selection and the expected ones may be caused either by an erroneous overestimation of small probabilities or by an erroneous underestimation of medium and large probabilities. This phenomenon is called the effect of the subjective evaluation of small, medium and large probabilities.

The results of additional research on decision making under conditions of risk within descriptive models were published in 1982 by the American economists G. Loomes and R. Sugden . They proposed the so-called regret theory, which is based on two main premises:

  • • most people evaluate the outcome of a decision not from the point of view of its actual realization, but relative to what could have happened had they made not this decision, but another — better — one;
  • • most people give preference to a smaller but certain outcome (payoff) over a larger but probabilistic (uncertain) outcome (payoff). For example, if a group of test subjects is offered a choice between alternative A — with a probability of 0.50 of winning 1000 rubles or with a probability of 0.50 of receiving nothing, and alternative B — certainly receiving 500 rubles, most will choose the second option out of unwillingness to be disappointed in case of failure.

Please note!

The identified features of the psychological behavior of people making decisions under conditions of risk mainly relate to the following component of the decision-making strategy — the rules for the preference of alternatives.

The factor of decision making under conditions of risk must be taken into account within descriptive models when implementing decision-making strategies.

Taking into account different conditions and features of decision making has led to the formation of a whole series of particular concepts of people's psychological behavior in decision making.

Reference

At present there exist various particular concepts describing, to one degree or another, individual aspects of the general problem of people's psychological behavior in building managerial decisions — G. Simon's theory of "bounded rationality"; K. Arrow's concept of "social choice"; the "conflict-compromise" theory of B. Levinger and D. Schneider; the "organizational-style" theory of V. Vroom and W. Yetton; the "anticipatory management" theory of L. Plunkett and G. Hale; the "sociotechnical concept" of J. Meister; the "two-dimensional model" of leadership by R. Blake and J. Mouton; the "heuristic model of administrative decisions" by W. Cohr; a group of concepts developed within the "decision-making school" of R. Mack, Kirmoyy, T. Taylor, M. Richards, P. Greenlaw, F. Shull, L. Cummings, N. Quinn, etc.

The variety of particular decision-making concepts is due not only to the consideration of different conditions and features of decision making, but also to different ideas for finding the final decision.

It should be noted that, regardless of which of these particular concepts is used, one of two basic concepts is simultaneously applied to the decision-making process — the concept of utility maximization or the concept of bounded rationality. This is explained by the fact that the basic concepts reflect the DM's position on only one question, which is resolved when using any particular concept — whether the DM wants to consider all possible alternatives and seek the optimal one among them (the concept of utility maximization), or is satisfied with finding the first effective alternative that meets all his requirements (the concept of bounded rationality).

Please note!

The variety of decision-making conditions and the requirements placed on them determine the multitude of corresponding psychological aspects of people's behavior in decision making, which in turn accounts for the variety of the concepts themselves of people's psychological behavior in decision making. The application of any of the particular concepts presupposes the simultaneous use of one of the two basic concepts — the concept of utility maximization or the concept of bounded rationality.

  • URL: http://3ys.ru/psikhologiya-vyrabotki-i-prinyatiya-upravlencheskikh-reshenij/sushchnost-lichnostnogo-profilya-prinyatiya-resheniya.html (accessed: 03.08.2015).
  • Concepts of people's psychological behavior in decision making. Any descriptive decision-making model describes a decision-making strategy that implements a particular concept of decision making and specifies (for that concept) the rules for the preference of alternatives and the ways (methods) of calculating criterial evaluations. The influence of the factor of human psychological behavior in descriptive models is significant: • in choosing a decision-making concept; • in forming rules for the preference of alternatives;
  • in choosing the method of calculating the criterial evaluation. The choice of a decision-making concept is made by the DM taking into account the information situation and the availability of normative (algorithmic) support for finding the final decision. Among the main concepts of decision making are the concept of utility maximization and the concept of bounded rationality. Their main difference is that the concept of maximum utility presupposes the search for an optimal solution, while the concept of bounded rationality presupposes the search for an effective one that satisfies the DM's needs. To further reflect the fact of the DM's psychological behavior in choosing a concept, these concepts can be regarded not simply as decision-making concepts, but as concepts of people's psychological behavior in decision making. Definition: A concept of people's psychological behavior in decision making is a set of specific psychological aspects that shape a person's behavior in decision making.
  • URL: http://www.rac.ru/monographs/129-4239 (accessed: 03.08.2015).
  • URL: http://www.syntone.ru/library/books/content/3589.html (accessed 31.08.2015).
  • See, for example: Lapygin Yu., Lapygin D. Yu. Managerial decisions: a study guide. Moscow: Eksmo, 2009. 448 p.
created: 2020-11-14
updated: 2026-03-09
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Lectures and tutorial on "Decision theory"

Terms: Decision theory