26 July 2024
Psychology of Decision Making - We Are Not Irrational, Are We?
Having completed business or management education, most of us are searching for the keys to adaptive decision making in classrooms, textbooks and other controlled environments with clear metrics and practical tools. Rigorous analytical methods can help us in well-ordered situations. Frequently, however, what we were taught about making tough choices quickly falls apart, because the dynamic real-world situations are anything but well structured. We have to rely on our experiences, intuition and creativity instead, and look for a different set of approaches.
A major focus of this inter-disciplinary course is whether, or under what conditions, people deviate from normative rules of decision making that have been developed by other disciplines, such as economics or management. We will examine ambiguous situations which are difficult to comprehend, and where conventional methods may not lead to good solutions. We will explore assessments of risk and uncertainty, including research on heuristics and biases. We will approach decision situations from the individual’s perspective, through the different lenses of individual personalities and styles. We will see how decisions are actually made and how psychological processes can explain the apparent deviation from logic and rationality.
This course will help students develop personal competencies in the following areas:
- enhancing mental effectiveness by learning the psychology behind rational thinking, as well as its barriers;
- identifying personal decision making styles and recognising the styles and strategies of others;
- strengthening problem solving, decision making and negotiation skills.
Preliminary assignment: Preliminary readings (as per syllabus) and completing two tests (on 'canvas')
Class 1: Thinking about thinking: Mental models; tests, case study discussion
Class 2: Personality types; self-awareness, cultural values
Class 3: Stress in decision making, crisis management - in-class experiment
Class 4: Problem solving and decision making; Decision models
Class 5: Are we rational? - concept of rationality; ‘quasi-rationality’
Class 6: Limits to decision making; cognitive biases
Feedback activity: short reflective analysis of a personal decision
Class 7: Ambiguity; Crisis decision making
Class 8: Creative problem solving. Intuition
Class 9: Interactive decision making – negotiation
Class 10:Negotiation styles, psychology of persuasion
Class 11:Comprehensive Review
Pedro Monteiro - Department of Organization
This is a graduate level course. CBS Summer University courses at Copenhagen Business School is open to all and welcomes domestic and international students as well as professionals.
Demonstrate understanding of the major decision making theories as they apply to various business, management, or real-life settings;
Be able to analyse real-world problems, evaluate data appropriately by identifying gaps and making thoughtful assumptions;
Identify the mental models that underlie decision makers' thinking processes;
Recognise crisis situations and present appropriate strategies for handling them;
Recognise the various processes that lead decision makers to be „less than rational” and suggest ways to overcome their limitations and inconsistencies;
Identify strategies for dealing with various levels of ambiguity and uncertainty in problem solving and display understanding of the role of intuition in the decision making process.
DKK 6000: Tuition fee for Open University students (EU/EEA/Swiss citizenship)
DKK 15000: Tuition fee for non-European students.