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Theoretical Models of Decision Making

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Submitted By sinandrei
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Theoretical models of decision-making, and their neuroscientific underpinnings
Introduction
In this essay I would like to focus the theoretical models of decision making that have come from psychology, cognitive and ecological alike, and review relevant literature from cognitive neuroscience that may or may not provide neural foundation for the claims that they have formulated. The reason for which I find it interesting to contrast these two approaches is there different outlook on the concept of “bias”.
Traditional – closed systems - approaches to decision-making
The investigation of decision-making is a multidisciplinary endeavor with researchers approaching the area from different fields and applying numerous different models (Hastie, 2001). The normative model of decision-making originates from mathematics and economics and the most prominent normative model is perhaps Subjectively Expected Utility (SEU; Savage, 1954). This model of rational behavior implies that people act as if they are calculating the "expected utility" of each option, choosing the one that they believe has the highest value. It has been criticized however, as some researchers doubted whether humans actually perform the mental multiplications and additions suggested by SEU. Simon (1955) was the first to challenge the assumptions of optimizing decision theories (such as SEU) making strong arguments concerning the limited capacity of the decision maker, for which he introduced the term “bounded rationality” (Gigerenzer & Selten, 2002; Simon, 1955, 1992). He proposed an alternative; the ''satisficing'' decision model. This states that when people are faced with numerous options, they choose the first course of action that meets or surpasses some minimum criterion, instead of searching for the normative optimal choice (Klein, Orasanu, Calderwood, & Zsambok, 1993).
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