What is Rational Decision Making?

Rational choice is a very common view of how we make decisions.  It underpins many of the accepted ways we think about economics (like neoclassical economics), how we make decisions in organizations, and is also important in political science. In fact, we value rationality and would like to believe that we are rational in our decision making.  Thats why even when we were not rational when we made a decision, we often endeavour to justify the decision by providing a rational explanation retrospectively.

For this reason understanding the strengths and weaknesses of rational decision making provide us with insight into much of what is happening around us in real life.  Rational decision making theory has a pronounced impact on society as we know it.  We therefore give specific attention to explaining what rational choice is and how it is believed to impact on our decision making. 

The view that decision making is rational is widely accepted and believed.  It confirms our aspirations.  It has also proven itself to be very useful in studying and facilitating decision making.   Rational Decision Making champions a procedural (or structured) approach to decision making where the following questions inform our final choice of what to decide:

There are very many decision support tools and techniques that implicitly follow a rational definition of decision making, and utilising them then implicitly embeds the strengths and weaknesses of the rational view of decision making into the proposed results.  The steps in decision making in this structured approach to decision making often broadly follow three phases:

1. Analyse the problem
2. Define the alternatives and describe each in terms of its strenghts and weaknesses (often in relation to the other alternatives)
3. Choose between the alternatives using the "decision rule"

Bounded Rationality is a derivative of rational decision making, and was designed to relax the pure view of raionality in order to be closer to actual experience.  We give an overview of both rational decision making and bounded rationality in all our paid-for courses on Decision Making.

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We offer a FREE email course about Rational Decision Making

Rationality is an almost universal aspiration.  All of us would like to think that we are rational decision makers.  This email course unpacks the dynamics of rational decision making and points out its strenghts and weaknesses.  It does not assume any prior knowledge about rational decision making or any other approach to organizational decision making.

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All Online Courses and Resources on Decision Making

We offer a number of online courses and other services and resources on decision making .  You might want to have a look at them. 

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