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Decision-making involves weighing alternatives and choosing between them.
People don’t always make rational decisions. In the 1950s, economist Herbert Simon proposed that people’s capacity to process and evaluate multiple alternatives limits their ability to make rational decisions. Because it is difficult to simultaneously evaluate all possible options, people tend to focus on only a few aspects of the available options. This can result in less than optimal decisions. Two types of decisions are decisions about preferences and risky decisions. People generally use a variety of different approaches when making these types of decisions.
Some decisions require people to make choices about what they would prefer.
Example: Josh needs to choose which of two armchairs to buy. He must decide which one he likes better.
People may use additive or elimination strategies when making decisions about preferences.
When using an additive strategy, a person lists the attributes of each element of the decision, weights them according to importance, adds them up, and determines which one is more appealing based on the result.
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