Decision Theory

The theory of how humans make decisions.
Interdisciplinary study of how individuals and agents make choices under uncertainty, combining probability, economics, and psychology to model decision-making.
As there are always unpredictabilities in human behavior.
Ethics, Heuristics, Biases... also the society...they all play a role. As will previous outcomes of similar behavior, to prevent bad things from happening again.
There are ways to influence this. Yet, inevitably, we are not machines. Human brain: It's pretty complicated!

Risk Management in decision-making

There are generally uncertainties in life; it’s usually the case that for the time, effort, and sunk costs into an option, it is an acceptable risk if the expected value is that you are to gain more back than you lost. Still, pessimism bias occurs. For instance, losing $1000 in gambling seems "stronger" than winning $1000.

Method 1 of decision making: Deleting one option

Instinctively the way of deleting one out of 2 works pretty well for decision making.
This leads exactly to the fact that as the difference becomes more and more minimal, it's really hard to choose one from two.

Category:Psychology