Rational Decision-making Process Research Articles

Cognitive Biases in High-Stakes Decision-Making: Implications for Joint Pediatric Cardiology and Cardiothoracic Surgery Conference.

Extensive research has consistently demonstrated that humans frequently diverge from rational decision-making processes due to the pervasive influence of cognitive biases. This paper conducts an examination of the impact of cognitive biases on high-stakes decision-making within the context of the joint pediatric cardiology and cardiothoracic surgery conference, offering practical recommendations for mitigating their effects. Recognized biases such as confirmation bias, availability bias, outcome bias, overconfidence bias, sunk cost fallacy, loss aversion, planning fallacy, authority bias, and illusion of agreement are analyzed concerning their specific implications within this conference setting. To counteract these biases and enhance the quality of decision-making, practical strategies are proposed, including the implementation of a no-interruption policy until all data is reviewed, leaders refraining from immediate input, requiring participants to formulate independent judgments prior to sharing recommendations, explicit probability estimations grounded in base rates, seeking external opinions, and promoting an environment that encourages dissenting perspectives.

CSR Motivations in Voluntary Non-Financial Disclosures: The Preparers’ Voice

CSR reports are communication tools, appropriate for informing stakeholders of the CSR practices conducted by organizations. This article aims to explore the reasons why complex organizations have adopted on purpose the CSR report to meet their needs and to discover why they have chosen to adopt the integrated report as an alternative to the sustainability report. This study is based on an explanatory case study of two healthcare organizations that have exactly implemented Integrated Reporting (IR), instead of Sustainability Reporting. The research method used is the field study. This work points out how organizations create and use CSR reports, even if they are not mandatory. If the IR looks like a “managerial innovation”, there is always a risk that the diffusion of these tools could simply be the latest popular trend, followed by internal or external proponents, rather than a rational decision-making process. The study has implications for the policymakers, the organizations, and their integrated report. The policymakers can understand if this tool can be useful for the organizations, to promote internal CSR. The study contributes to literature about the willingness to publish CSR reports, as an expression of the internal and external factors that influence voluntary reporting choices.

Behavioral Finance and Stock Market Anomalies: Exploring Psychological Factors Influencing Investment Decisions

Behavioural finance questions the rational decision-making process that is based on the information and economic realities of traditional finance. This study investigates the impact of emotions and irrationality on financial decision-making. The increase in study on stock market anomalies leads to an investigation of the psychological factors that influence irrational investor behaviour and market inefficiencies. This research challenges the principles of rational finance theories by examining the significant impact of behavioural finance on stock market anomalies. The study demonstrates the impact of biases, emotions, and cognitive errors on human behaviour, highlighting specific cognitive faults such as anchoring bias, overconfidence, and loss aversion. These flaws lead to distorted decision-making and contribute to market anomalies The study of investing social dynamics explores the phenomenon of herd mentality and the unreasonable increases in asset values. In addition to questioning established financial theories, behavioural finance has the potential to assist investors, politicians, and market regulators. The study aims to construct intricate models that accurately depict financial decision-making by examining psychological variables that give rise to market oddities. The incorporation of behavioural finance into investment decision-making has transformative consequences for investors and financial professionals. Investors acquire the ability to make more astute decisions, spread out risks, and manage market instability by using emotional intelligence. Behavioural data may assist financial professionals in enhancing client-advisor relationships, refining communication methods, and increasing competitiveness in an evolving financial landscape. Behavioural finance provides a constantly evolving understanding influenced by biases and emotions, which poses a challenge to financial practices.

Decision-making: The Process Contributing to Professional Public Administration

This article analysis one of the main issues of public administration theory and practice, which is helpful in government functioning and policy-making. Research study includes the discourse on how to plan and make decisions on behalf of democratic attitude. Public administration is utmost outcome, and the success or failure of the government depends on it. Theoretical debate on decision-making process, accordingly, surveys the fundamental perception on rational and incremental decision-making processes. It refers basically to the administrative institutions. Decision making is important for organizational effectiveness because of its central role in the overall process of directing and controlling. Decisions do not automatically guarantee all programmed outcomes, but denoting actions with professionalism and public support. As a valuable process it is likely to be a central element of management and leadership. Comparative study of examples of developed democratic systems shows the high responsibility of public institutes and government as key actors. Particular attention is paid there to the professionalism of government, which is a vital characteristic of any democratic public administration and virtually a policy quality. Findings of current research shows that decisions are not based solely on laws and regulations. Moreover, as the study shows, many other appropriate skills of decision-makers are important that will be seen with the close linkages with strategic governance.

Examining the impact of perceived psychological distances of quitting and continuing tobacco smoking on antismoking intention: a cross-sectional study

To date, little research has been conducted to understand the role of psychological distances on smoking behaviour. Construal Level Theory posits that individuals mentally construe events, objects, or ideas based on their perceived distance in terms of spatial, temporal, social, and hypothetical dimensions, influencing their judgments and decision-making processes. The aim of the current study was (1) to provide a comprehensive exploration of psychological distances of costs and benefits of tobacco smoking and antismoking intention and (2) to examine whether smoking can be attributed to rational behaviour based on the psychological distance weighted balance of perceived costs and benefits of quitting and continuing smoking. Mediation models delineating the relationships among temporal and hypothetical psychological distances, personal relevance and antismoking intention were tested on cross-sectional survey data of 1486 smokers (880 men, Mage = 39.9 years, SD = 13.36). Psychological distances were shown to be important factors in the cognitive evaluation process of smoking behaviour. Perceived temporal distance to smoking continuation/cessation was related to personal importance and hypothetical psychological distances, which were associated with anti-smoking intention. Furthermore, antismoking intention was related to the psychological distance-weighted gain-cost balance of quitting and continuing smoking. The current findings enhance our knowledge of the cognitive evaluation of the outcomes of smoking, indicating that the choice of not quitting smoking may be partially based on a biased rational decision-making process.

Behavioral biases and the rational decision-making process of financial professionals: significant factors that determine the future of the financial market

PurposeThis paper describes how financial professionals' behavioral biases influence their financial forecast and decision-making process. Most of the earlier studies are focused on well-developed financial markets, and little is researched about financial professionals, such as institutional investors, portfolio managers, investment advisors, financial analysts, etc., in emerging markets.Design/methodology/approachAn expert-validated questionnaire measure four prominent behavioral biases and Indian financial professionals' rational decision-making process. The final sample consists of 274 valid responses using the purposive sampling technique. IBM SPSS and AMOS structural equation modeling (SEM) software are used to build measurement and structural models, multivariate analysis including regression, factor analysis, etc.FindingsThe results provide empirical insights into the relationship between behavioral biases and the decision-making process. The results suggest that the structural path model closely fits the sample data. The presence of behavioral biases indicates that financial professionals' forecasting and decision-making is not always rational but bounded rational or irrational due to these factors. Furthermore, these biases (except overconfidence bias) have a markedly significant and positive relationship with irrational decision-making.Research limitations/implicationsIt is critical to eradicate these psychological errors, but awareness and attentiveness toward behavioral biases may help financial professionals to make informed decisions. Investors can improve their portfolio decisions and investments by recognizing their judgment errors and focusing on specific investment strategies to mitigate the impact of these biases. It is necessary to incorporate behavioral insights while developing training techniques for financial professionals. Rules of thumb, visual tools, financial coaching and implementing social-cultural elements in training programs enable financial professionals to develop simple, engaging, appealing and customized approaches for their clients.Originality/valueThis novel study is the first of this kind of research that examines the relationship between financial professionals' behavioral biases and rational decision-making process. This study significantly and remarkably provides insights into irrationality in financial professionals' decision-making.

How smart health leaders make intuitive decisions.

A rational decision-making process enables a leader to process information clearly and logically and thus allows for accurate perception and interpretation of the event. It is believed this process prevents leaders from excessively distorting reality and being impacted by cognitive biases, both of which are possible, particularly under stressful conditions. But what happens when the decision-making environment is rapidly changing and the leader does not have time to deploy a thorough, comprehensive rational decision-making process? In time-compressed decision-making environments, leaders must often make quick, accurate decisions, with incomplete, inaccurate, or rapidly changing information, under extremely stressful conditions. To improve the ability of a leader to make high-stress, time-compressed decisions under rapidly changing conditions, we offer the intuitive decision-making process as an alternative to rational decision-making and discuss five components essential to improve intuitive decision-making outcomes.

WHY DID RUSSIA INVADE UKRAINE? PLAUSIBLE THEORETICAL EXPLANATIONS

This paper examines three major theoretical frameworks to explain Russia’s decision to invade Ukraine. It is argued that although the war caught many by surprise, it can still be explained by at least several International Relations theories. President Putin’s decision may be erroneous but it should be treated as rational.
 The purpose of this research is to suggest theoretical frameworks suitable for understanding and evaluating the key foreign policy and security decisions taken by the current Russian leadership. It is assumed that the moves and choices taken by the Kremlin, in particular on the eve of Russia’s invasion of Ukraine, resulted from the way decision-makers had perceived the threats and options of the time. It is also assumed that International Relations as a scientific discipline has relevant explanations and frameworks for dealing even with such seemingly irrational decisions like the one taken before the invasion. Political leaders are not going mad; they rather act within specific environments framed by available information and some basic theoretical assumptions.
 This article focuses on examining Russia’s invasion of Ukraine through the lenses of security dilemma, rational decision-making and power transition process. The author argues that each of these approaches can provide a coherent explanation of a strategic logic behind the decision to wage war. Moreover, by using each of these instruments it may be possible to assess Russia’s foreign and security policy beyond its Ukrainian direction, and also in a retrospect.
 An interstate war in a modern world is assumed to bear extremely high costs and generate high risks. Because of that, wars are so rare. But this does not imply that wars are impossible. At different levels and under certain conditions, launching a war may still seem to be the best course of action, in particular for revisionist states, even if it a choice between the bad and the worst.

Effects of misleading online advertisements on the purchase intention of mature Chinese consumers for dietary supplements

PurposeAdvertisements for dietary supplements (DS) often include misleading claims regarding their health benefits. In this study, the authors designed an online advertisement for plant-based DS featuring misleading claims and investigated its effects on mature Chinese consumers before and after revealing the false claims. A consumer involvement framework was developed to evaluate the mediating effect of advertising involvement (AI) on the correlation between product involvement (PI), situational involvement (SI) and purchase intention (PI).Design/methodology/approachA total of 467 mature adults aged over 40 years who resided in China's Yangtze River Delta region and had experience in purchasing DS online were recruited. Relevant data were collected through an online survey and analysed through structural equation modelling.FindingsCognitive PI was positively correlated with both SI and PI and SI was positively correlated with PI. AI negatively moderated the correlation between affective PI and SI. Both cognitive PI and AI were positively correlated with PI and the correlation was mediated through SI.Originality/valueDS consumption is a rational decision-making process driven by utilitarian motives. Consumers who are aware of the misleading claims adopt a cautious evaluation approach and place themselves in specific purchase situations before making a purchase decision. This study advances the literature by incorporating the consideration of misleading advertisements into the consumer involvement model within the context of online DS consumption. The study's findings provide insights to intensify monitoring of false advertisements in the DS industry and design effective consumer education programmes.

The Effects of Scarcity Messages and Impulsivity on Customers’ Rational Purchase Decision-Making Process in Group-buying Social Commerce

The Effects of Scarcity Messages and Impulsivity on Customers’ Rational Purchase Decision-Making Process in Group-buying Social Commerce

The use of the Game Theory Context in the strategic political marketing design. The case of the USA elections.

This study presents a conceptual framework approach that can provide useful information about the political strategy via the rational decision-making process, as well as create an efficient tool for political marketing campaigns. Game theory combines the models of conflict and cooperation for people whose decision-making is considered rational. How can this be implemented in voting behavior, influencing a wide range of issues, relations and behaviors? We consider the political competition as a strategic game, where we have to identify the opposing players, the purpose of the game and its rules. Game theory helps us understand the decision-making process towards strategic issues during political competition. The modeling of the voting behavior can explain the way people form theirs in the challenging environment of the political competition. In the present study we will investigate the way game theory can be involved in American elections, trying at the same time to depict behaviors and political marketing strategies. Using the game theory and the political marketing approach, our study examines the different strategies that politicians used during the last American election of 2016, explaining how their strategy influences the result of the elections. We focus mostly on financial, social and environmental issues, but also on issues about security, immigration and international relations. We measure the intensity of the candidates’ focus on these issues and we present two game theory matrixes as examples base on this innovative concept.
 
 EL Classifications: G34, G14, M41.
 Key words: game theory, political marketing, strategy, decision making
 

Pupillometric evidence for a temporal expectations-based account of persistence under temporal uncertainty.

People often quit waiting for delayed rewards when the exact timing of those rewards is uncertain. This behavior often has been attributed to self-control failure. Another possibility is that quitting is the result of a rational decision-making process in the face of uncertainty, based on the decision-maker's expectations about the possible arrival times of the awaited reward. There are forms of temporal expectations (e.g., heavy-tailed) under which the expected time remaining until a reward arrives actually increases as time elapses. In those cases, the rational strategy is to quit waiting when the expected reward is no longer worth the expected time remaining. To arbitrate between the "limited self-control" and "temporal expectations" accounts of persistence, we measured pupil diameter during a persistence task, as a physiological marker of surprise (phasic responses) and effort (pre-decision diameter). Phasic pupil responses were elevated in response to reward receipt. Critically, the extent to which pupils dilated following rewards depended on the delay: people showed larger pupillary surprise responses the more delayed the reward was. This result suggests that people expect the reward less the longer they wait for it-a form of temporal expectations under which limiting persistence is rational. Moreover, predecision pupil diameter before quit events was not associated with how long the participant had been waiting, but rather, depended on how atypical the quit decision was compared with the participant's usual behavior. These data provide physiological evidence fora temporal expectations account of persistence under temporal uncertainty.

Uncertain festival futures: how European music festival organisers navigate ‘loss’

Risk management and the navigation of loss are inherent to working conditions within the festival industry. With festivals cancelled, postponed or redesigned, the coronacrisis has deeply affected the already uncertain festival sector. Based on thirty-five interviews with Danish, Dutch and British music festival organisers, this article examines which losses organisers experienced when faced with a social trauma that disrupted their ontological security. Additionally, it analyses how they have coped and responded to this situation via organisational and emotional strategies. Three phases in how organisers cope with loss are identified, where organisational and individual responses play varying, complementary roles: (1) imminent short-term loss and its realisation, (2) acceptance of short-term loss and (3) moving beyond loss. The analysis reveals how managing potential personal loss and facing organisational crisis should not merely be seen in terms of a rational decision-making process but is also mediated by emotional losses organisers experience as not only their livelihood, but their work identity is existentially challenged. Implications are drawn on the nature of cultural work, with attention to the entwinement of personal and professional identities.

An annealing based approach to informed mode choice in agent-based transport simulations

Modeling and simulating travelers mode choice is of great importance when evaluating novel transportation modes, policy measures or other changes to the overall transport system. The agent-based transportation framework MATSim has been widely used to study such scenarios and evaluate potential changes in the modal split. The default mode choice behavior in MATSim lets agents explore all their mode options randomly. A scoring-based co-evolutionary algorithm is applied to maximize the utility over a large number of iterations and arrive at consistent modes shares.In this paper, we present a new mode choice approach, that resembles a more rational decision-making process. First, the utilities of all available modes are estimated and used as costs to build a graph with all trips of the day. A k-shortest-path algorithm is applied to compute the most promising k combinations of modes for the day. Additionally, we formulate a pruning methodology that allows to remove unpromising modes. Finally, a selection model based on a multinomial logit is used to choose one of the plan candidates. The scale parameter of the selection model is annealed over the course of iterations to predict deterministically to the candidate with the highest estimate utility. Our simulation experiments show that convergence speed compared to random mode choice is significantly increased and only 25% of iterations are required to achieve overall better scores.

Multi-Category Innovation and Encroachment Strategy Evolution of Composite E-Commerce Platform Based on Multi-Agent Simulation

An in-depth study of the product encroachment behavior on the composite e-commerce platform is of great significance to standardize the platform economy. This paper studies product encroachment behavior of composite e-commerce platforms with double-differentiated multi-product competition and constructs a game model of product innovation by an independent seller and product encroachment by the platform owner. Using multi-agent simulation, we simulate the bounded rational decision-making and interaction process of multiple agents in multiple periods and analyze the main parameters’ influence. Results indicate the following: (1) In dual-differentiated multi-product competition, the third-party seller is more willing to invest in innovating high-quality category P, and the profit-driven platform owner only encroaches on the new variants of category P. (2) The larger consumers’ platform owner preference can encourage the third-party seller to innovate high-quality new products. The increase in vertical differentiation of categories can enhance the third-party seller’s innovation motivation for the traffic-attracting category. (3) A reasonable commission rate set by the platform owner can ensure the variety of variants of various categories, thereby expanding the sales scope of the composite e-commerce platform. Diseconomies of scale of category diversity management costs hinder the growth of product variety in the online marketplace.

Self-disclosure on social networks: More than a rational decision-making process

Although consequences of sharing personal information can be negative and severe (e.g., identity theft), individuals still engage in extensive self-disclosures on social networks. One commonly applied explanatory approach is the privacy calculus. Following this, self-disclosures can be conceptualized as rational choices resulting from a weighing of risks and benefits. However, this view misses the additional impulsive nature of decisions. The current study therefore takes the lens of dual-process theories and highlights that self-disclosure decisions can also be guided by an impulsive system. To test for the impact of descriptive social norms, a warning message, privacy-related decision-making styles, and perceived benefits and risks on individuals’ self-disclosure decisions, the fictitious social network “AHOY!” was created. It enabled the measurement of participants’ (N = 551; Mage = 40.77, SDage = 13.93) actual self-disclosures on two decision stages: 1) whether or not a post was created, 2) how much information (on a psychological and informational dimension) was provided. Further, descriptive social norms (i.e., the extent of other users’ self-disclosures) and the presence/absence of a warning message were varied. The remaining factors were measured using questionnaires. The results imply that cognitive and affective processes (expected to be triggered by the investigated factors) are involved differently in the two decision stages. While both the reflective and impulsive system may be involved in the first stage, with the reflective system also potentially taking a predominant role, the impulsive system may be predominant when deciding how much to disclose. This highlights the importance of exceeding common assumptions of rationality to better understand and support individuals’ self-disclosure decisions.

The Mangal Play: A serious game to experience multi-stakeholder decision-making in complex mangrove social-ecological systems

In order to achieve collaborative action in nature conservation and natural resources management, stakeholders have to understand and acknowledge other stakeholders’ interests, values, world visions and objectives and they have to overcome the problem of irrational decision-making through innate opposition discourses. In this paper we developed the Mangal Play, an experiential learning method to have participants adopt the role of a particular stakeholder in an imaginary mangrove forest social-ecological system (SES). The Mangal Play is a serious game, more specifically a role-play, aimed at promoting oral dialogues between 20 stakeholders involved in governance, fisheries, aquaculture, agriculture, forestry, tourism, transport, conservation and communication sectors. By providing tools to lecturers and scientists to execute it in a public or classroom setting, the Mangal Play stimulates a decision-making process while accepting compromise and distinguishing bottom-line issues from negotiable positions, and instructs about the behaviour of complex real-world systems in a safe learning environment. We exemplify how social network analysis can serve to visualise the outcome and further develop the Mangal Play. In this way we hope to help stakeholders take into account diverse positions in a rational decision-making process.

Insights on selection of undergraduate dental students.

The goal of selection to dental education was to find those with the greatest aptitude for dentistry. Recently, schools have introduced a variety of tools; however, these have often been adopted without appropriate evaluation regarding existing evidence for fairness, reliability or validity. We explore dental admissions staff beliefs about the quality of different selection tools, with the objective of exploring their decision-making in implementing selection practices. This qualitative study is underpinned by a social constructionist epistemology, in which our principal concern is "explicating the processes by which people come to describe, explain or otherwise account for the world (including themselves) in which they live." We conducted individual interviews with 15 of the 16 UK dental admission leads to elicit their views around admissions processes and aims. Data coding and analysis were initially inductive, using thematic analysis. After the themes emerged, we applied a deductive framework of affordances to group themes and then examined these for heuristics. We identified three main themes; "Selection Tool Use," "Widening Participation Practices," and "Professionalising the Admission Lead Role." Admission leads spoke favourably of tools that allowed a "holistic" view of the applicants "potential". Selection tools were favoured if they enabled "Gut feeling". Leads spoke of evaluating candidates, making sure they were "rounded", and "know what dentistry is all about." In justifying the use of elements of their procedure, the use of heuristics was prominent. In order to minimise the potential consequences of poor selection decisions, it is important to acknowledge that dental admission leads are at risk of depending on sub-optimal heuristics to make judgements about effective selection (shaped by previous practices) rather than using more rational decision-making processes based on the extant evidence (regarding the quality of different selection tools). Future research may be usefully informed by the knowledge translation literature to offer solutions for improving selection practices in dental education.

Choice experiment selection of tourism destinations in a dual process theory framework: The role of decision style and potential to promote deliberation.

Models of consumer choice that assume rational decision processes are too simplistic, as they ignore intuitive processes and combinations of intuition and rationality. In dual process theory, System 1 processes are intuitive, fast, require low cognitive effort, and involve autonomous systems, while System 2 processes are deliberative, slower, reflect greater cognitive effort, and involve controlled attention. The dual process framework facilitates understanding of decision processes that may be diverse and complex. Based on response time as an indicator of System 2 use, we fill gaps in the tourism and choice experiment literatures by i) assessing the dimensionality of a decision style scale and its role in predicting System 2 use and ii) assessing whether researcher interventions, such as instructions, can promote System 2 use. The study is based on survey-based choice experiment responses of 483 domestic and international visitors across two Norwegian nature-based tourism destination contexts. Each visitor completed four choice experiment tasks for a total of 1,932 choice occasions. Results indicated diversity in extent of System 2 use. The decision style scale was multidimensional with both the intuitive and rational subscales predicting response time. We encourage inclusion of decision style scales–and specifically multidimensional scales–in future tourism choice and choice experiment applications. Statistically significant coefficients for instructions and unhurriedness suggest potential for researchers to increase System 2 processing in survey tasks. We encourage future use of this intervention, especially when survey tasks are intended to replicate “real world” decisions that rely heavily on System 2 use.

Mental model for information processing and decision-making in emergency care.

BackgroundUncertainty and time pressure in emergency departments add a challenge to the rational decision-making process, specifically when encountering a critical patient who requires a prompt response. However, there has been little attempt to develop a mental structure model to understand the thought processes and identify cognitive weaknesses points in nurses’ decision-making. A better understanding can inform changes in both practice learning strategies and decision-making in emergency department. This study aims to better understand how newly employed nurses process information and initiate actions in emergency situations characterized by time constraints and uncertainty.MethodParticipants worked under time pressure and uncertainty to solve a simulated shock case by establishing an assumption of what type of shock the simulated patient might have and its cause. An 8-minute window was available to initiate action. Following the simulation, a retrospective think-aloud interview was conducted.FindingsParticipants’ ability to identify the category of shock was better than their ability to identify the underlaying cause of the shock. This influenced their ability to intervene correctly. Participants’ thinking process in an emergency situation can be organized using ABCDE acronym as follows: (1) awareness of the situation, followed by, an instant (2) generation of beliefs (presumption), (3) controlling the consequence (first-line management action), (4) involvement in deliberate thinking and, finally (5) execution, actions (second-line management action). The cognitive weakness was mainly noticed during the first-line management action when participants were involved in immediate lifesaving activities.ConclusionClassification of the steps involved in decision-making when encountering emergency situations may provide insight into the strengths and weaknesses of the thought process at different stages. Further studies are required.