Question

Dr. White is fond of telling people they are NOT rational decision-makers, even though they think they are. Explain why people aren’t rational and explain the non-rational models of decision-making (maximum of 400 words).

Answer 1

People aren't rational because rational decision makers always need to be fully informed about the situation before taking any decisons which is always not feasible because in practical world no information is complete and there might be risks associated with the assumptions made. So, even if they think they are being rational, in reality it is not always the case. In case of rational decision makers, they will always try to evaluate the situation first, then come up with solutions and ideas and finally do the thing which will maximize its benefits. For instance, a person might consider buying a diet soda believing it has less amount of sugar and hence willl suffice his/her needs as well as maximise satisfaction. However, he/she might be misinformed about the level of sugar in the soda and thus incur risk while making a rational decision.

The non-rational model believes in taking into account all the possible drawbacks and risks associated with a product or service and will make the choice which will best satisfy its need keeping it mind all its faults. It is know as satisficing or choosing the option which is good enough.
In situations when there is a time limit and there is not enough time to do proper research, decision makers can also make decisions based on their intuition. Making decisions based on intuition will however require some expertise or past experiences to deliver satisfying output. However, these choices will always have some bias and thus there will be some error while making decisions. For example, in the emergency landing on the Hudson river made by Captain Chelsea "Sully" Sullenburger, his intuition saved many lives whereas he could have decided to listen to the operators and try to land at the nearest airport. Thus, non- rational decisions are not always the best but it will always deliver good enough results keeping in mind the practical constraints.