Peep into Behaviourial Science of Choice
10 Pages Posted: 4 Dec 2015
Date Written: December 3, 2015
Everyday life is full of choices and preferences. An important question for many researchers is how people make (management) choices. Specifically, researchers are interested in the assumptions, beliefs, habits, and tactics that people use to make everyday choices. Research suggests that brain considers various sources of information before making a choice. Traditional approach is to compare judgment or a choice to a standard or 'benchmark.' The comparison enables evaluation of whether a particular judgment is 'good' or 'bad' relative to the standard. Normative models which offer standards are important because clear sets of rules or axioms, such as those derived from behaviour economics (expected utility theory) can be used to test predictions about human behaviour. When behaviour deviates from the predictions of normative models attempts can be made to ascertain why and, often, techniques for overcoming such biases. This approach with its focus on deviations from normative models contrasts the ideal of a homo behaviour economics with the apparent reality of a cognitive miser (or even loser) and has been enormously influential and useful. However, how does it do this? In addition, why does the process sometimes go awry, causing impulsive, indecisive, and confused choices; that lead to perilous and potentially dangerous behaviours? Human behaviour is not the product of a single process, but rather reflects interaction of different specialized subsystems. These systems usually interact seamlessly to determine behaviour, but at times, they compete. Result is that brain sometimes argues with itself, as these distinct systems come to different conclusions about what we should do. Human behaviour is not under constant and detailed control of careful and accurate hedonic calculations. It is product of an unstable and irrational complex of reflex actions, impulses, instincts and habits. The bottom question is; How to model the decision-making process?
Keywords: expected utility,irrational complex of reflex actions, impulses, instincts and habits
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