Answer the following statements true (T) or false (F)
1. Nonrational models of decision making describe how managers should make decisions rather than how they actually do.
2. The incremental model is a nonrational model of decision making.
3. Sandra did an Internet search for Jamaican hotels when she was setting up her vacation, but found over 7 million results, of which she could only handle looking at about two pages. Sandra is operating under conditions of bounded rationality.
4. Satisficing occurs when a manager takes small, short-term steps to alleviate a problem.
1. FALSE
The nonrational models are descriptive rather than prescriptive: They describe how managers actually make decisions rather than how they should.
2. TRUE
Three nonrational models are (1) satisficing, (2) incremental, and (3) intuition.
3. TRUE
Bounded rationality is a concept that suggests that the ability of decision makers to be rational is limited by numerous constraints, such as complexity, time and money, and their cognitive capacity, values, skills, habits, and unconscious reflexes.
4. FALSE
In the satisficing model, managers seek alternatives until they find one that is satisfactory, not optimal. In the incremental model, managers take small, short-term steps to alleviate a problem, rather than steps that will accomplish a long-term solution.
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