Man is not a „Homo rationalis” or „Homo economicus” any more than he is a „Homo emotionalis”. How we perceive our world, interpret it and act accordingly is largely determined by our emotion system and the neurological emotional structures formed in it and is dominated during times of increased arousal.
The rational decision does not exist, an idea upon which philosophy, psychology and many other disciplines have long been based. Economics also confirm what Herbert A. Simon assumed with his term „bounded rationality” in 1965, that Homo economicus and his rational decisions do not exist. Beginning in 2008, Dan Ariely and later the Nobel laureate Daniel Kahneman, as well as many others from the sub-area of Behavioral Economics impressively demonstrated this, having reached more than 200 cognitive biases by 2020, a number that is still increasing.
The rational decision is a prioritization
The decision to choose between at least two options is generally valid and misleading at the same time. This definition is misleading because choosing between two or more options would be a priority; it is generally valid because it includes a choice between the options from the emotion and cognition system.
A decision in the narrower sense means initiating an action for or against an option. In contrast, the rational decision represents a prioritization that ranks several possible decisions (options) according to the order of their importance. With the emergence of statistical and artificial models, a rational decision is usually equated to these.
The reasoning makes the rational decision
With the help of evaluation and justification, one of the options for a rational decision is chosen if it appears to be „use-maximized” or „reasonable”. However, the reasoning itself also arises from emotional-cognitive cycles. This means that the rational decision would be explained through itself and would, therefore, only exist as a theoretical construct. From the reasoning, however, one can see which emotions – mostly fear with concern for one’s safety as well as anger as goal-oriented influence as well as guilt and shame in emotional-cognitive cycles – were at work.
Reasoning itself constitutes a coherent view of the world that results from the interaction of the emotion and cognition systems. As an internal stimulus, reasoning acts as a natural reinforcement of the coherent world view that has been created. Coherent reasoning in the final emotional-cognitive cycle makes the rational decision.
The rational decision is made in cycles
If the term rational decision is used further on in this article and in this series of articles, then as a conscious decision with a reason based on rational facts, in the knowledge that both reason and rationality arise from emotive-cognitive cycles.
A rational decision can only be approximated if there is little emotional arousal. If it is too high, the effect of the emotions will become dominant, and the choice of options and their justification will move further and further away from rational concepts and specifications and move into the dysfunctional areas of the emotions.
The rational decision requires cognition
The rational decision as a theoretical construct is nevertheless an extremely important and valuable form of decision because it activates cognition and reduces the risk of the affective decision and the autopilot. If the parties involved were aware that the emotional motive „concern for safety” is dominant in an insurance company and that the opportunity to exert influence in a start-up would likely be pursued, the justification would be given a specific direction. However, if the logic of the emotions is too strong and dominates the reasoning, the rational decision loses its value.
It would make sense to demand the rational decision in an entrepreneurial environment if intuition were deliberately integrated and decision-making processes were used.
Make a conscious decision with the KiE decision-making process
The theoretical construct of rational decision forms the core of the KiE decision strategy. If it is supplemented by the conscious use of intuition, it results in the KiE decision strategy. The KiE decision strategy brings experience and knowledge together. It combines cognition with intuition and thus forms the solid foundation for every good decision-maker.
The human decision-making process is the design requirement for three easy-to-learn process steps. The order is based on the inseparability of emotions (E), intuition (i) and cognition (K), the KiE trilogy. In the first step (1), as an innovation, the emotive-cognitive cycle is deliberately interrupted and the unsolicited KiE intuition is recorded with the KiE scale. As a second step, the cognitive rating (2) is determined. In the final third step (3), the KiE intuition is deliberately requested so that the decision on the way to implementation is not boycotted by the inseparability of the decision systems. Only then will a decisive implementation with the intended effect become successful in the fourth step (4).
If you now believe that the KiE decision strategy is too complicated and takes too long, please keep in mind that intuition only takes around 350 milliseconds to manifest itself. This delays the decision by about one second. The time saved on interrupted brooding and safe decisions is worth to us the decision-making strategy.
More about the series of articles on human decision making
Further articles about the different human decision forms can be found after the source below under tags “Article series human decision forms“.
More about the series Artificial Intelligence
More articles about artificial intelligence and how it can be extended with KiE can be found after the sources below at tag “Artificial Intelligence“.
Februar 2020, Richard Graf, Elsa Graf
„The rational decision does not exist.” Richard Graf
ARIELY, Dan. Predictably irrational. New York, NY: Harper Audio, 2008.
GRAF, Richard. Die neue Entscheidungskultur: Mit gemeinsam getragenen Entscheidungen zum Erfolg. Carl Hanser Verlag München 2018.
KAHNEMAN, Daniel. Thinking, fast and slow. Macmillan, 2011.
SIMON, A. Herbert. Administrative Behavior. A Study of Decision-making Processes in Administrative Organization…. Macmillan, 1965.
„People make decisions and decisions make people.” Prof. Harmut Schröder