Conclusion of Week 1

This week we briefly explored some approaches to modelling individuals making decisions. We talked about the classical choice theory based on the concept of utility. We saw how this approach can be used to divide big problems into smaller ones that are easier to manage and understand. We also saw that ultimately, even when we do use multi-attribute decision analysis, we like to rely on intuition when we evaluate the outcome.

Later we talked about the bounded rationality approach. We saw that there are many factors that play a role when people make decisions, and rationality is not only about what is chosen, but also about how it is chosen, where, when and by whom. We also saw some models of simple heuristics for decision making.

Finally we made a simple exercise to see that how we think and solve problems is deeply dependent on the social context. The larger picture here is that understanding human decision making is impossible without looking at the broader, especially social, background. If we want to understand how people decide, we need to look at them as part of their environment, their group. But we cannot also fully understand the group without paying attention to the individuals. In the next week we will see how our sociality shapes our world through individual decisions.