Question

Non-rational decision-making models, such as _________ describe how managers sometimes make decisions.

A) Rational Choice Model
B) Incremental Model
C) Bounded Rationality Model
D) Normative Decision Model

Answer 1

The Bounded Rationality and Incremental Models acknowledge the limitations of human decision-making, unlike the traditional economic model which assumes idealized rational behavior. People and organizations often make decisions that deviate from purely rational economic models due to various constraints, leading to 'irrational' behavior.

Step-by-step explanation:

Non-rational decision-making models, including the Bounded Rationality Model and the Incremental Model, describe how managers sometimes make decisions. These models recognize that decision-making occurs within the constraints of limited information, time, and cognitive processing capacity. The traditional economic model of decision-making is not intended as a literal description of how decisions are made by individuals, firms, and governments; instead, it assumes idealized rational behavior where decision-makers are fully informed and always act in their own best interest. In reality, individuals and organizations often display behavior that deviates from this rational model, due to information asymmetry, cognitive biases, and other factors.