The Rational Choice Model of Decision Making Is Impossible to Apply

question 158

Multiple Choice

The rational choice model of decision making is impossible to apply in reality because:

• A)it ignores the fact that problems must be defined before alternatives are chosen.
• B)it assumes that human beings make decisions based on their emotions.
• C)it assumes that people are efficient and logical information processing machines.
• D)it ignores the fact that people evaluate their decision after an alternative has been chosen and implemented.
• E)All of these statements are correct.

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Definitions:

Game Theory

A branch of mathematics and economics that studies strategic interactions among rational decision-makers.

Solitaire

A card game played by one person or a metaphor for any activity done alone without the need for other participants.

Oligopoly Behavior

Strategic actions by firms in a market where a few dominant firms interact, leading to solutions and outcomes that depend on the choices of the other market participants.

Prisoner's Dilemma

The Prisoner's Dilemma is a standard example of a game analyzed in game theory that shows why two completely rational individuals might not cooperate, even if it appears that it is in their best interest to do so.