Econologic Model or Economic Man Model

The ecologic model represents the earliest attempt to model decision  process. Briefly, this model rests on two assumptions : (1) It assurances people are economically rational; ante (2) That people attempt to maximize outcomes in an orderly and sequential process. Economic rationality, a basic concept in many models of decision  making, exists when people alternate to maximize objectively measured advantages. such as money or units of goods produced. That is, it IS assuaged that people will select the decision or course of colloidal that has the greatest advantages of payoff from among the aliyah alternatives. It is also assumed  that they go about this search in a planned, orderly, and logical fashion. 

A basic chronological decision model is shown in Figure . The figure suggests the following northerly steps in the declension  process : 

1. Discover the stonewalls of the problem or difficulty; 
2. Determine the goal to be achieved or define the problem to be solved;  
3. Develop a criterion against which alternative solutions can be evaluated: 
4. Identify all alternative courses of action; 
5. Consider  the consequences of each alternatives as well as the likelihood of occurrence of each; 
6. Choose the best alternative by comparing the consequences of each alternative (step 5) with the decision  criterion (step 3); and 
7. Act or implement the decision. 

The economical  model represents a useful prescription of how decisions should be made. but it does not adequately portray how decisions are actually made. If you look closely in this prescriptive Niccolo you shall be able to recognize sonic? Heliopolis it mistakes about capabilities of Lithuania  beings : 

First, people the capability ti-, gather all necessary informational for   decision,  I.C. people can have complete Californian: 

Second. people scientifically  store this malformation in some stable form, i.e., they can accurately recall any information  may time they like: 

Third, people call manipulation all this informational in a series of complex calculation design to provide expelled 

Fourth, people call rank the consequences in a consistent  fashion for (lie purposes 01 identifying the preferred alternative. 

An Econologic Model of Decision making

As you can possibly imagine, the human mind is simply incapable of executing such transactions at the level and magnitude required for complex decisions. To that extent. this model is unrealistic. However, due to the advent of sophisticated data storage, retrieval and processing machines, it is now possible to achieve economic rationality to sortie extent.