The Rationality of Decisions

...the faulty premise that people (and especially management) make rational decisions.

There is a naive idea (the so-called modern one) about what it means to be rational. Being rational is a matter of criticism (relative), and not a matter of truth (absolute). Rational processes are ones which start from experiences and infer defeasible theories, and not ones which start from laws (rules, processes) and apply them. Rational decisions are always made in a context of limited knowledge, with processes for acquiring information having a cost, and a finite speed. (bounded rationality: Herbert Simon, Kahneman).

The consequence is that it may be rational to make decisions based on esthetic or moral grounds (elegance). What is not rational is to assume there is only one way to make decisions, based for instance on the results of measurements, being blind to the biases which led to them. And of course, to not make decisions.

-- MarcGirod - 13 Jun 2009