A Primer in Decision Making March, James. (2009). A Primer on Decision Making: How Decisions Happen. New York, NY: The Free Press. Reviewed by James Hutchinson

Key concepts: Rational Choice Theory Rule Following The Garbage Can Model of Decision Making

What is rational choice theory? Rational choice theory: A rational theory of choice assumes that people make decisions that are consequential and preference-based. Actors have perfect knowledge. Preference-based. Consequences, preferences and alternatives are known in advance and remain stable over time. Useful for broad predictions of aggregate behavior (e.g., the inverse relationship between rising costs and falling demand).

March’s critique of pure rational choice models Pure rational choice theories fail to account for uncertainty. Limited Rationality: decision makers are constrained by cognitive limitations and/or incomplete knowledge. Decision makers take psychological short cuts to cope with such constraints through the development of typologies, targets, and rules (heuristics). Many actors satisfice instead of maximize when making decisions. Satisficers choose an alternative that is good enough, or meets a particular target. Maximizers choose between a set of all possible alternatives.

March’s critique of pure rational choice models cont’d Future performance outcomes are predicted based on a small number of past results, downplaying the role of luck and enhancing the social validity of the decision maker.

Rule following Decision processes which follow a logic of appropriateness. Logic of appropriateness: Appropriate rules are matched with particular situations and identities. Decision makers ask themselves three things: What kind of a situation is this? What kind of a person/organization am I/is this? What does a person/organization do in a situation like this?

Rule Following Model The social basis of identity provides a template for how to act. Experiential learning: Past experiences are drawn upon to recall the rewards/punishments associated with certain identities. Contracts are a common means of coping with deviations from the rules.

Multiple-actor decision making Consists of two stages: 1st Stage: Bargaining, negotiation, and policymaking take place. An agreement is reached and a team is formed in an effort to align preferences and identities. 2nd Stage: The implementation of the decision occurs, consistent with the agreement reached and following either a logic of consequence or a logic of appropriateness Multiples often use ‘logrolling’ to achieve policy aims.

The Garbage Can Model A model of decision making that emphasizes the roles of exogenous factors, temporal proximity, and access to decisions in problem solving arenas. Choice opportunities (the garbage cans) such as meetings and committees bring together problems, solutions, and decision makers. Competing demands on a decision maker’s time and attention will determine what decision is made and who makes it.

Conclusion The rational choice model is a tactic subsumed by the rule following model. The rule following model is a much more credible picture of decision making as it occurs in the real world. Consequential and preference-based decisions flow naturally from the identities we are socialized into and the incentive-based rules from which we derive value. Rules and identities also provide a robust shield from the perils of uncertainty– a way of finding order in chaotic and volatile systems.