Question 1

Bounded rationality is choosing the first alternative that appears to give an acceptable or satisfactory resolution of the problem.

Accepted Answer

The answer of Bounded rationality is choosing the first alternative...

Question 2

Certainty is the norm in decision situations.

Accepted Answer

Certainty is not the norm in decision situations, as many decisions involve some level of uncertainty or risk.

Question 3

Behavioral scientists are cautious about applying classical decision theory to many decision situations because they recognize that human beings have cognitive limitations that restrict their information-processing capabilities.

Accepted Answer

Behavioral scientists have identified cognitive limitations in human beings that make it difficult to apply classical decision theory in many decision situations. Therefore, they are cautious about applying this theory.

Question 4

Responses to uncertain environments seldom involve intuition,educated guesses,or hunches.

Accepted Answer

Responses to uncertain environments often require intuition, educated guesses, or hunches as individuals may not have all the information to make a fully informed decision.

Question 5

Certainty is a less than ideal condition for managerial problem solving and Decision-Making.

Accepted Answer

Certainty is actually an ideal condition for managerial problem solving and decision-making because it means that all relevant information is known and outcomes can be predicted accurately.

Question 6

Classical decision theory appears to fit very well in today's chaotic world of globalizing high-tech organizations.

Accepted Answer

Classical decision theory assumes a rational decision-making process and does not account for the complexity and uncertainty of today's business environment. Therefore, it may not be suitable for globalizing high-tech organizations.

Question 7

Classical decision theory models view the manager as acting in a world of complete certainty.

Accepted Answer

Classical decision theory assumes that managers have access to all necessary information and can make decisions with complete certainty, without any ambiguity or risk.

Question 8

In the classical decision model,the problem is not clearly defined,knowledge of possible action alternatives and their consequences is limited,and the manager chooses a satisfactory solution to the problem.

Accepted Answer

In the classical decision model, it is assumed that the problem is clearly defined, knowledge of all possible action alternatives and their consequences is available, and the manager seeks the optimal solution to the problem.

Question 9

Bounded rationality refers to the idea that,while individuals reason well and are logical,they have their limits with respect to interpreting and making sense of things within the context of their personal situations.

Accepted Answer

Bounded rationality theory posits that individuals may not have unlimited capacity to process and analyze information and may rely on heuristics and simplifying strategies to make decisions, particularly in complex or uncertain situations.

Question 10

When dealing with risk environments,probabilities are assigned through objective statistical procedures rather than intuition.

Accepted Answer

In risk environments, probabilities can be assigned through both objective statistical procedures and subjective judgment or intuition, depending on the availability and reliability of data.

Question 11

Risk environments exist when decision makers lack complete certainty regarding the outcomes of various courses of action,but they are aware of the probabilities associated with their occurrence.

Accepted Answer

In a risk environment, decision makers have some level of knowledge or certainty about the probabilities of different outcomes, although they may not have complete certainty. This distinguishes it from an uncertain environment where probabilities cannot be determined.

Question 12

Behavioral decision theory models view the manager as acting in a world of complete certainty.

Accepted Answer

Behavioral decision theory models recognize that the world is full of uncertainty and managers must make decisions in such an environment.

Question 13

Uncertain environments exist when managers have so little information that they cannot even assign probabilities to various alternatives and their possible outcomes.

Accepted Answer

In uncertain environments, managers have insufficient information to assign probabilities to different alternatives and their outcomes, hence making it difficult to make informed decisions.

Question 14

The behavioral decision model allows for an optimizing decision that gives the absolute best solution to the problem.

Accepted Answer

The behavioral decision model recognizes that humans have cognitive limitations and are unable to consider every possible option and outcome. Therefore, it aims for a decision that satisfies a satisfactory level of quality rather than an absolute best solution.

Question 15

In the behavioral decision model,the manager faces a clearly defined problem,knows all possible action alternatives and their consequences,and then chooses the alternative that offers the optimum solution to the problem.

Accepted Answer

In the behavioral decision model, the manager may not have a clearly defined problem and may not be aware of all possible action alternatives and their consequences. Instead, they rely on intuition and past experiences to make decisions. The focus is on understanding the decision-making process and the factors that influence it, rather than on finding an optimal solution.

Question 16

Of the three decision-making environments (certainty,risk,and uncertainty),risk environments are the most difficult for decision makers.

Accepted Answer

Uncertainty environments are the most difficult for decision makers because they lack both complete information and probabilities for outcomes, unlike risk environments where probabilities are known.

Question 17

Behavioral decision theory models accept the notion of bounded rationality and suggest that people act only in terms of what they perceive about a given situation.

Accepted Answer

Behavioral decision theory models recognize that individuals have limitations in their ability to process information and make optimal decisions, which is known as bounded rationality. Therefore, they suggest that individuals make decisions based on their perceptions of the situation rather than complete and objective information.

Question 18

Threats to a brand or the firm's reputation are referred to as reputation risks.

Accepted Answer

Reputation risks are defined as potential threats to a company's brand or corporate image that could cause harm to its bottom line, customer trust or shareholder value.

Question 19

Risk management focuses on anticipating risk in situations and factoring risk alternatives into the decision-making process.

Accepted Answer

Risk management involves identifying and assessing potential risks, and then developing strategies to address or mitigate those risks. By anticipating risks and incorporating risk considerations into decision-making, organizations can better protect themselves and minimize potential losses.

Question 20

The behavioral decision maker is viewed as acting most often under uncertain conditions and with limited information.

Accepted Answer

The behavioral decision maker is often faced with uncertainty and incomplete information, leading to more subjective and heuristic decision-making processes.

Quiz 9: Decision-Making and Creativity