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What is logical decision making?

by Daniel J. Power
Editor, DSSResources.COM

Many adjectives are used to modify the compound word decision making. Supposedly logical decision-making is an important skill for many professions. Experts and specialists apply their knowledge in a given area using logical decision processes to make informed decisions. For example, medical decision-making often involves a diagnosis and the selection of an appropriate treatment. The phrase logical decision making refers to a systematic, rational reasoning process that results in decisions that make sense given the available facts. Roy (2016) defines a related concept of rational decision making as a "logical, multistep model for choice ... that follows an orderly path starting from problem identification through the expected solution" (p. 34). Is such a process possible? Is logical decision making possible?

Roy's definition is normative and he assumes a decision maker has full or perfect knowledge about the alternatives. Simon (1979) notes "The classical theory of omniscient rationality is strikingly simple and beautiful. Moreover, it allows us to predict (correctly or not) human behavior without stirring out of our armchairs to observe what such behavior is like. All the predictive power comes from characterizing the shape of the environment in which the behavior takes place. The environment, combined with the assumptions of perfect rationality, fully determines the behavior (p. 496)."

Actual decision situations vary from the rational decision making ideal. For example, naturalistic decision-making research (Klein, 2008) shows "When people need to make a decision they can quickly match the situation to the patterns they have learned. If they find a clear match, they can carry out the most typical course of action. In that way, people can successfully make extremely rapid decisions.(p. 457)" Research also shows that in situations with higher time pressure, higher stakes, or increased ambiguities, experts may use intuitive decision-making processes rather than structured approaches. They may follow a recognition primed decision that fits their personal experiences and arrive at a course of action quickly without weighing or evaluating alternatives.

According to Klein (2016), "NDM studies found that experienced decision makers recognize patterns and donít compare options. They evaluate an option by imagining how it would play out." Klein described a Recognition Primed Decision (RPD) Model of Rapid Decision Making. In this model, a decision maker is assumed to generate a possible course of action, compare it to the constraints imposed by the situation, and then select the first course of action that is not rejected

According to Liebowitz (2014), "In the age of Big Data and analytics, it is easy to overlook the importance of intuition for reaching well-grounded decisions. Yet the evidence for 'gut feel' is compelling. A recent research study at Tel Aviv University found that executives who relied on their intuition were 90 percent accurate in their decisions. A 2016 University of Cambridge study found that hedge fund traders who relied on their intuition outperformed those who did not use intuition." Logical decision making is considered the opposite of emotional decision making. The Upfront Analytics Team (2015) argues "To be frank, without emotion, humans would be fairly incapable of making any decision; let alone a logical one."

Logical and rational decision making may be an unattainable ideal that does not describe human decision making behavior, but logical decision making is worth striving for even if in the end we must satisfice and accept an alternative that is "good enough".

References

Camp, J., "Decisions Are Emotional, Not Logical: The Neuroscience behind Decision Making," bigthink at URL http://bigthink.com/experts-corner/decisions-are-emotional-not-logical-the-neuroscience-behind-decision-making .

Changing Minds, "Emotion and Decision," at URL http://changingminds.org/explanations/emotions/emotion_decision.htm

Klein, G. A., "Naturalistic Decision Making" (PDF). Human Factors: The Journal of the Human Factors and Ergonomics Society. 50 (3), 2008 pp. 456Ė460. doi:10.1518/001872008X288385 and at URL https://www.ise.ncsu.edu/wp-content/uploads/2017/02/Klein_2008_HF_NDM.pdf.

Klein, G., "The Naturalistic Decision Making Approach," Psychology Today, February 1, 2016, at URL https://www.psychologytoday.com/blog/seeing-what-others-dont/201602/the-naturalistic-decision-making-approach

Liebowitz, J., "Bursting the Big Data Bubble: The Case for Intuition-Based Decision Making," Auerbach Publications, July 25, 2014. Also, see Webinar "Intuition-Based Decision Making" at URL https://smith.queensu.ca/insight/webinars/intuition_based_decision_making .

Recognition Primed Decision Making Model at URL http://www.decision-making-confidence.com/recognition-primed-decision-making-model.html

Roy, S., Decision Making and Modelling in Cognitive Science, Springer India, 2016.

Simon, H., "Rational Decision Making in Business Organizations," The American Economic Review, Vol. 69, No. 4, September, 1979, pp. 493-513.

The Upfront Analytics Team, "Decision Making: Emotional vs Logical," June 3, 2015 at URL http://upfrontanalytics.com/decision-making-emotional-vs-logical/

Last update: 2018-04-22 06:02
Author: Daniel Power

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