Making Rational Decisions

The rational decision-making model describes a series of steps that decision makers should consider

if their goal is to maximize the quality of their outcomes. In other words, if you want to make sure that you

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make the best choice, going through the formal steps of the rational decision-making model may make

sense.

 

Let’s imagine that your old, clunky car has broken down, and you have enough money saved for a

substantial down payment on a new car. It will be the first major purchase of your life, and you want to

make the right choice. The first step, therefore, has already been completed—we know that you want to

buy a new car. Next, in step 2, you’ll need to decide which factors are important to you. How many

passengers do you want to accommodate? How important is fuel economy to you? Is safety a major

concern? You only have a certain amount of money saved, and you don’t want to take on too much debt,

so price range is an important factor as well. If you know you want to have room for at least five adults, get

at least twenty miles per gallon, drive a car with a strong safety rating, not spend more than $22,000 on

the purchase, and like how it looks, you have identified the decision criteria. All the potential options

for purchasing your car will be evaluated against these criteria. Before we can move too much further, you

need to decide how important each factor is to your decision in step 3. If each is equally important, then

there is no need to weigh them, but if you know that price and mpg are key factors, you might weigh them

heavily and keep the other criteria with medium importance. Step 4 requires you to generate all

alternatives about your options. Then, in step 5, you need to use this information to evaluate each

alternative against the criteria you have established. You choose the best alternative (step 6), and then you

would go out and buy your new car.

 

Of course, the outcome of this decision will influence the next decision made. That is where step 8 comes

in. For example, if you purchase a car and have nothing but problems with it, you will be less likely to

consider the same make and model when purchasing a car the next time.

 

 

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