Problem Formulation and Alternative Generation in the Decision Making Process

Abstract

Classical and neoclassical economic theory, as well as statistical design theory, through their neglect of human bounded rationality -- the vast disparity between human computing capabilities and the complexity of our world - - both give a seriously distorted picture of human decision making and omit at least three components of the decision making process that are of central importance. In this paper, I will outline what is known, today, about these neglected aspects of human decision-making. A great deal is known, mainly as a result of the progress of cognitive science in the last generation. Economics can make rapid progress by drawing upon this storehouse of new knowledge to reconstruct and expand its foundations. Keywords: Cognitive psychology; Economics; Decision making; Subjective expected utility; Problem formation; G operations research.

Open PDF

Document Details

Document Type
Technical Report
Publication Date
Jun 30, 1988
Accession Number
ADA219007

Entities

People

  • Herbert Simon

Organizations

  • Carnegie Mellon University

Tags

Communities of Interest

  • Human Systems
  • Materials and Manufacturing Processes

DTIC Thesaurus Topics

  • Artificial Intelligence
  • Central Nervous System
  • Classification
  • Cognitive Science
  • Computer Science
  • Computers
  • Contracts
  • Decision Theory
  • Economics
  • Environment
  • Fungi
  • Psychology
  • Recognition
  • Security
  • United States Government
  • Universities
  • Warning Systems

Readers

  • Economics
  • Organizational Psychology.
  • Systems Analysis and Design