Decision Making Strategies
- Part 2

Read the introduction and other Decision Making Strategies - Part 1.

Principles of choice

Decision rules or principles of choice are criteria or policies that are utilized when choosing between the available alternatives. The following are common principles of choice and lend themselves to particular decision strategies.

Minimax: the idea is to minimise the maximum possible loss. Basically you determine what the worst outcome of each alternative is and go for 'the best of a bad lot'. The attention is obviously on minimizing the worst that can happen.

Maximax: the idea here is to maximise the maximum outcome, i.e., choose your alternative with the best potential outcome. Also called decisions under uncertainty because several outcomes may occur, but the probabilities of the outcomes are not known. People who enjoy risk use these decision making strategies.

Disaster avoidance principle: obviously this decision making strategy is designed to choose the alternative with the least chance of disaster.

Risk minimization principle: is about choosing the alternative with the best chance of an acceptable outcome. At first, this may seem like maximax, but the latter has to do with best outcome, this one has to do with best chance of a favorable outcome.

Loss avoidance principle: choosing the alternative with the lowest possibility of loss.

But, remember...!

Remember that these decision strategies are for rational models, i.e., where you are comparing and contrasting alternatives.

Remember, too, that typically we build reasons, rationalizations and justifications to explain our decisions after we make our decisions emotionally...

Read Part 1

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