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Decision making is fundamental to modern life in its individual, collective and corporate aspects.
Individuals in the developed world are faced with personal decisions to an extent that previous
generations would have found difficult to imagine. A combination of economic, social and
technological developments has produced a situation where people have to make important
decisions about their relationships and family life, their health, and their education and careers.
They are involved in the management of their personal finances as home owners and consumers.
Decisions are also fundamental at a societal level. The ballot box is central to democratic political
systems as is the jury to the legal system. Business and financial institutions are faced daily with
decisions about investment, research and development, and deployment of resources in a complex
and uncertain environment.

It is perhaps the social and economic significance of decisions that has resulted in the considerable
influence upon psychological approaches to the study of decision making of concepts from other
disciplines, in particular, economics. The concepts of utility and subjective probability and theories
that account for their integration have shaped psychological enquiry and influenced its research
paradigms.

Subjectively expected utility (SEU) theory is a model of rational behaviour, originating in

economics and mathematics. This assumes that decisions should be reached by summing over the
set of alternatives the utility of each alternative weighted by the subjective probability of its
occurrence. Its elegance and authoritative status provide an incentive for decision makers to apply
it to their own situation. Nevertheless, the value of utility maximisation as a normative choice
principle was criticised, for example, by Simon (1957), who argued that people can successfully
adapt to their environment by identifying actions that are merely satisfactory for their goals. He
proposed the alternative normative principle of satisficing: take the first course of action that is
satisfactory on all important aspects. He argued that this principle could be applied without
sophisticated powers of discrimination and evaluation, powers that humans do

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Questia, a part of Gale, Cengage Learning. ×××
 

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   Book Title: Decision Making: Cognitive Models and Explanations. Contributors: Rob Ranyard -
editor, W. Ray Crozier - editor, Ola Svenson - editor. Publisher: Routledge. Place of Publication: London. Publication Year:
1997. Page Number: 5.

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Paul A. Klaczynski

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  im, Dave, and Keith are brothers, ages 9, 11, and 14, respectively. On their
father's advice, they decided to spend the day playing golf at a small par-3
course. The daily special, "$10 for all the golf you can handle," thrilled them.
Although none had played the game previously, the mere idea of smacking a
1.68" diameter ball around, trying to sink it into each of the course's nine
4.24" diameter cups, seemed like a great way to spend an otherwise slow
summer day. After all, they had worked hard completing their chores and
had earned the $15 their father had given each of them.

But what seemed like a good idea at the time took a few bad turns. The
day, which began pleasantly enough, was hot and humid by the time the boys
reached the fourth hole. Worse, the difficulties²and the concomitant frus-
trations²of the game were dawning on them. Shot after shot was sliced,
hooked, duffed, or otherwise misplayed. No evidence suggested that their
games were improving. And so, the initial fire for the game that had burned
in the boys' hearts dimmed to a small, barely glowing ember.

It may seem obvious that the boys should quit, end the humiliation, and
move on to an activity from which they could derive at least a modicum of
enjoyment. The question must nonetheless be asked: How likely is it that
any of the boys will actually quit? Given their different ages, is one of the
boys more likely than the others to opt out of the game?

The dilemma would be less apparent, and the decision to quit much eas-
ier, if not for the $10 investment the boys made to play "all the golf they
could handle." Indeed, had they played for free, had they not "sunk" well-

-39-
Questia, a part of Gale, Cengage Learning. ×××
 

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   Book Title: The Development of  udgment and Decision Making in Children and Adolescents.
Contributors:  anis E.  acobs - editor, Paul A. Klaczynski - editor. Publisher: Lawrence Erlbaum Associates. Place of
Publication: Mahwah, N . Publication Year: 2005. Page Number: 39.