Limiting the search for alternatives makes sense from an action perspective, while careful consideration of options may increase decision-rationality [ 10].
According to decision theory, rationality requires you to perform the action of maximum expected utility (if there is one).
This study also documents a relationship between decision making rationality and pricing capabilities (but not firm performance) thus suggesting that intuition in pricing decisions could drive firm performance.
Our results suggest that the level of championing of pricing by the CEO positively influences decision-making rationality, pricing capabilities, and collective mindfulness thereby leading to a significantly higher firm performance.
We find that the empirical evidence ranges from strong (split incentives/agency issues and inattention/salience phenomena) to moderate (heuristic decision-making/bounded rationality, systematic risk, and option value) to weak (learning-by-using, loss aversion, myopia, and capital market failures).
Given earlier findings that showed a close link between cognitive reflection, unbiased decisions and rationality, our results suggest that mathematical anxiety might be negatively related to individuals' ability to make advantageous choices and good decisions.
He called this less ambitious view of human decision making "bounded rationality" or "intended rational behavior" and described the results it brought as "satisficing".
However, very few papers have paid adequate attention to the decision maker's rationality, i.e., the optimism level of the decision maker.
More recently, Pettit and Schweikard 2006 have dispelled some of this mystery, with the suggestion that shared activity (understood along Bratmanian and Tuomelan lines) figure in implementing the decision procedure and rationality at the collective level.
For example, while there are theories proposing that the clinicians use a deductive or elimination approach in making diagnostic decisions, the bounded rationality theory emphasizes the importance of including environmental factors in clinical decision making [18], [19], [20].
Lin, for instance, refers to three competing 'rationalities' in decision making – 'technical' rationalities (such as those driven by evidence) must compete with 'political' and 'cultural' rationalities (demands) [ 38].
