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Author: marlene johnson

At the end of this tutorial, the learner will understand that each person makes decisions based on a unique evaluation of multiple factors

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Rational Factors in Decision Making

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From the moment we wake up till we go to bed at night we're making decisions. All day long, little decisions, big decisions. How do we decide things? Well, I'm Marlene, and I'd like to take up that question with you today in this tutorial.

So as I said we make decisions all day long. A decision is simply a choice between two or more items or options. So we make decisions that are quick, that are simple. We do them every day. Things like what am I going to eat? What am I going to do for supper? So let's just take a moment and look at that decision. We begin to think about what are my options here. There's a new recipe I'd like to try. It looks really good. It's quick. But I might have to stop at the store and buy an ingredient for that. I have some leftovers in the refrigerator. It's chicken, I had chicken for lunch, but hey it's only half an hour to make that. I'll whip it up, I'll put a salad, kids all like it, and I'll eat chicken again.

So what did I just go here? Very quickly I'm going back and forth over my options. I've got the new recipe, I've got the leftovers, and I've got the chicken. Pretty soon it becomes clear to me that the pros here are outweighing the cons. I had chicken for lunch. But you know what, I'm hungry, the is simple, it's already there, and the kids like it. I'm going with it. Isn't that how we make decisions? We quickly weigh what I'm calling the pros and cons here to make our decisions.

Now there is another term for this, rather than just pros and cons, and it's cost benefit analysis. So what is cost benefit analysis? It is an assessment of the benefits gained versus the effort or resources expended associated with the particular option in a decision. We could see in just the little what to cook for supper decision, that the benefits gained in terms of time, everybody likes it, it's quick, and I'm hungry, that kinda outweighed the resources that I have to expend. Or the fact that maybe I've already eaten chicken. You know I was weighing these factors here, the pros won. So the benefits in this case outweighed the cost.

So we do this all day long. Many times more unconsciously than consciously. However, when we have a big decision to make-- something that we consider significant-- we give a lot more conscious attention to the factors that go into the decision. And there's a range of factors in every decision, in this cost benefit analysis.

So for example, you've decided you need to buy a new car. How do you make the decision about what car to buy? Well you might check with Consumer Reports. And you're looking at various cars, various price ranges-- cost is certainly a factor-- and safety, gas mileage, and seating. Given a growing family, how many people have to fit into this car? So you look at the physical conditions. You look at these logical, rational items to help you make this decision.

You're probably also weighing other factors here. More emotional perceptions. Well what kind of a car is this? Does it have a sunroof? I've always wanted a sunroof. What is my spouse going to think about this? I'm only looking at new cars here. Maybe I should look at used cars. I don't know if she's going to support the fact that I'm just looking at the new cars, because of the expense. How long do I think the car will last? Is it environmentally sound? What color is the car? That might be the most important decision that somebody in your family has in terms of making a decision about a car. So there's a variety of factors here you're going to look at and weigh in terms of the cost benefit analysis. And chances are it'll take some time to finally make your decision as you weigh these multiple factors.

So in closing here, all decisions that we make are made usually not just instantly. Sometimes it might feel more instant. Like what am I going to eat? What am I going to wear to work? But we're constantly quickly weighing a multitude of factors. And whenever it's a more significant decision, we consciously spend more time weighing the factors. Some of them are physical, some of them are emotional, and some of them are based on our perceptions of how others might react to our decision.

So I've enjoyed being part of this tutorial with you. And I look forward to next time.

Terms to Know
Cost/Benefit Analysis

An assessment of the benefits gained vs. effort or resources expended associated with a particular option in a decision.


A choice between two or more items or options.