Abstract
Decisions are pervasive phenomena in everyday life. Two predominant factors in decision-making theory are uncertainty and risk. Nevertheless, there are other cognitive aspects whose roles have recently gained attention in the literature. Those aspects include information acquisition strategies, scenario complexity, the dynamic and/or static aspect of choice scenarios, and the time-frame for the tasks. We propose a selective review and an integrative account as a way to argue for the theoretical importance of logically combining those different factors. The main argument is that the factors involved do not play independent roles, rather they can modulate each other´s influence given varying levels of the interactions between factors. The importance of better understanding such interactions lays on the choice of strategies that decision makers use to choose. Finally, theoretical, methodological and managerial contributions and implications relating to such approach are discussed.
Highlights
Decisions range from the mundane, such as choosing among brands of shampoo, to sensitive domains as in medical diagnostics and treatment options
Uncertainty, the time available, environmental contingencies and limited cognitive capacity often blur the frontiers between what is a real rational choice and a choice based on a subjective account of the world as perceived by the subject (Simon, 1959; Li, Baldassi, Johnson & Weber, 2013)
Uncertainty can be defined as a common situation with limited calculable information that can appear in different dimensions (Preuschoff, Mohr & Hsu, 2013), and resolving it is an important trait to successfully engage in adaptive behavior (Bland & Schaefer, 2012)
Summary
Decisions range from the mundane, such as choosing among brands of shampoo, to sensitive domains as in medical diagnostics and treatment options. Von Neumann and Morgensterns expected utility theory (1953) was closely related to the rational model described by Simon It states that the probabilities of the alternatives are known, that is, the agent knows the probabilities and the outcomes of every alternative, making the choice process less demanding. Choice problems and scenarios usually present themselves with various degrees of uncertainty and risk (Armbruster & Delage, 2015; Huang, Liu & Qi, 2016), which may remain static or can fluctuate up to the point of actual choice Variations in those degrees can lead to increased complexity in the decision scenario. Risk is present in most decisions where individuals have at least some information that makes it possible to state the probabilities of each alternative occurring if chosen. This article aims to propose a theoretical integrated view on the decision-making process and its varying levels of risk, uncertainty and complexity
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