Differentiate Classical vs Behavioral decision making model

Expert Solution

Classical decision making model assumes that decision maker will face a problem that is well defined, whose all alternatives along with there consequences are known to the decision maker. Decision maker will then choose an optimum alternative to make his/her decision.

On the other hand, Behavioral decision making model assumes that decision maker will have his/her own perception for the situation (problem) and chooses a solution that will satisfy him/her.

Classical decision making model works well when:

Given problem is structured.
Given problem is clearly defined.
Decision maker has complete information for making decision.
Given problem has certain environment.
All alternatives are known along with their consequences.

Behavioral decision making model works well when:

Given problem is unstructured.
Given problem is not clearly defined.
Decision maker has incomplete information for making decision.
Given problem has uncertain environment.
All alternatives are not known along with their consequences.

Also, it is to be noted that classical decision making chooses an optimum or best alternative as solution. While behavioral decision making chooses a satisfactory alternative as a solution.

keosha answered 1 year ago

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