Is Decision Making Rational?

Is Decision Making Rational?

To begin, let’s define what it is to be rational. Merriam-Webster has several definitions as to what the word ‘rational means.  Here is the definition we will focus on:

  1. a : having reason or understanding

b: relating to, based on, or agreeable to reason: reasonable a rational explanation rational behavior

While keeping that in mind, let’s discuss whether decision making a rational trait of human being. Is Decision Making Rational? Daniel Kahneman (in his book Thinking, Fast and Slow. 2011) find that rationality and stability are not a natural trait. Some of the reason why our decision making is not rational is due to the fact that we tend to have perception biases.

People tend to be irrational when they are making decision. People tend to go with the decision that they believe is secured. You may be wondering how this is irrational, but it all depends on the options offered.  The truth is that when it comes to decision making, a person will go for the option that they know for a fact will be secure even if the other options are in their favor.

Based on Kahneman’s theory, pain is not a linear emotion that people feel. It is not based on our losses, it is based on how we feel about them. To clarify our irrationality let’s take this example; a person will rather take a chances when the thing to win has more worth even when the chances of winning is smaller. This is in comparison to taking the chance of winning something smaller but with more chances to win. This explains why most of us will rather play the lottery than invest our money in the stock market. The odds of winning the Powerball are about one in 292 million, but why do we all still play it?

Our biases come from our fear to lose big while we tend to play safe. At the same time we tend to go after the big win even when our chances to lose are greater. The presentation of our choices also plays a big part on how we see them. Because of how our chances are presented to us, it affects our decision; psychologist calls that the framing affect. A “framing effect” is usually said to occur when equivalent descriptions of a decision problem lead to systematically different decisions. Another big bias in our decision is the way we picture or image them to be. Even our memories sometimes can play a big role in our decision making bias. The reason because of that is we tend to connect the dots and we don’t normally always get it right; in another word, we try to fill the void and give meaning to the meaninglessness.



I hate to use this example but for instance, when a woman/man has been in bad relation all his/her life, but they finally find the right person; they can’t seem to wrap their mind around the fact that this person won’t do them wrong. This is because of how past memories overtake and cause bias in our judgment. Yes, they will make the “rational decision” to be with that person, but people like these tend to say things like “It’s too good to be true.” Then they go and mess up their relationship.

My conclusion…

It is not that rational decision making is not possible, but in order to make a rational decision, a person has to have full understanding of all information of all the possible choices. All relevant info pertaining to the choices that has to be available to the person making the decision. From my other post, I stated that rational mind is relates back to how we feel, while rational decision making is focused on pure logic. This means no personal bias should be involved, but decision based on facts and logics with clear objectivity.

 

 


References

The Theories of Daniel Kahneman

Prospect Theory: An Analysis of Decision under Risk

Decision Making, Rationality, and Reasoning

Johnson, Jeff. Designing with the Mind in Mind : Simple Guide to Understanding User Interface Design Guidelines. San Francisco: Elsevier Science, 2014. (Chapter 12)

 

 

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