What Are Cognitive Theories

The decision making process includes cognitive processes that eventually lead to a choice in action while taking into consideration the alternative possibilities (Allen, Dorozenko, & Roberts, 2016). Not all choices have to lead to an action. The values and preferences of the person making the choice also comes into play when making the final decision. Problem-solving to obtain a certain goal or satisfactory by a solution is the main reason people go through the decision making process (Stefaniak, & Tracey, 2014). This process has many factors that end with one final result or solution. The decisions made can be rational or irrational and can be determined by explicit or tacit knowledge (Qingyao, Dongyu, & Weihua, 2016). Since the decision making process can be very difficult at time, psychologists have viewed the process in different perspectives to get a better understanding (Rossi, Picchi, Di Stefano, Marongiu, & Scarsini, 2015). The different perspectives include; psychological, cognitive, and normative or communicative rationality.

In social psychology, and more importantly sociology, groupthink is a process by which members of a cohesive group arrive at a decision that many individual members privately believe it is unwise. Jonestown is an example of what can be considered dangerous conformity. The members of the Peoples Temple originally thought being in the organization was the right thing to do and they were making the right choices, but that day they followed their leader in drinking the cyanide Kool-Aid, some thought the ideas were unwise. Even though the members of the cult were questioning the idea in their head, they followed along with their leader. They never had a thought that Jones would do anything like what happened that

According to Irving Janes (1972), groupthink occurs when a group makes an irrational decision because of group pressure fostering and the deterioration of ‘mental efficiency, reality testing, and moral judgement” (Irving, Janis, Victims of groupthink, p.9). Social influence is the effect that people have upon the beliefs or behaviors of others (Aaronson, 2004). Both groupthink and social influence theory have a factor in what

Cognitive Theory is the focus on how human development changes throughout time according to their experiences. Jean Piaget the pioneer for this theory; believed that we must understand how humans think in order to understand their behavior. Knowing this is important to apply to my worldview, because it will give me a better understanding of those I come in contact with. It is important to nurture and show compassion to those who come from different

Rational choice theory holds that people make

Secondly, the framing effect states that presenting the same option but in a different format can change people’s decisions. Plous (1993) states that, “individuals have a tendency to select inconsistent choices, depending on whether the question is framed to concentrate on losses or gains.” A good example of when framing is apparent is when stores advertise sale on their products. For example two stores both sell the same product which is priced at £50

Decision framing is the first step in the decision making process, and it builds the plan for making a good choice. The decision frame does not always ensure the right outcome. However, without it, there is no structure when making a decision. Framing is all about how information is presented and if it has an affect on the outcome. Framing is all about how we interpret the information. People interpret things

Groupthink theory often occurs without the group’s realization. Irving Janis formed 8 different symptoms that indicate groupthink. The first of these symptoms is illusions of vulnerability. This occurs when members of the group are overly optimistic and believe that nothing negative will arise from their decision. Janis describes it as taking great risks and acquiring the attitude of “everything is going to be OK, because we are a special group”. Secondly we have belief in inherent morality. This symptom is characterized as the groups thought that they could do no wrong. They believe that they have high morality, that they are right in all situations and they ignore the ethical consequences that could arise because of their decisions. As the third

The cognitive theory also believes in learning from prior experiences. They believe prior experiences, knowledge, and expectations are key to learning (Learnativity, 2002). The cognitive theory has a great way of thinking. Many self-help books have been written on the cognitive point-of-view. They believe that by changing our thoughts we can change our mood, decrease our anxiety, or improve our relationships. By thinking more positively we can easily quit smoking, make more friends, enjoy our job, pretty much do anything we set our mind to. Their basic premise is, if we perceive the glass as half full rather than half empty, the world will look much brighter. And in a

Decision-making can be a cognitive process of selecting a course of action form various options. Some of us are logical. Some of us are risk taking. Either way such characteristics play a role in our decisions. In my experience decision-making can

“Cognitive theory is focused on the individual's thoughts as the determinate of his or her emotions and behaviors and therefore personality. Many cognitive theorists believe that without these thought processes, we could have no emotions and no behavior and would therefore not function. In other words, thoughts always come before any feeling and before any action.” ("Cognitive theory in," 2004)

Framing is one of the most notable cognitive biases. It differs individuals’ judgments toward an identical problem by presenting it in different ways. In general, we expect decisions made under framing effects are deviated from the norm and rational judgment due the adoption of mental frames, which created the illusion for individuals. Different types of framing have been identified, for example, Hallahan (1999) classified framing into seven different types, including situations, attributes, choices, actions, issues, responsibility, and news. (Levin, Schneider and Gaeth, 1998) have classified framing effects into three major types: risky choice, attribute and goal framing. Some other types of framing have been discovered after these classifications published; number of size framing and framing risk in either absolute or relative terms are the most well known. This paper will be focusing on the attribute, risky choice and risk in absolute or relative terms framing effects, and showing how they influence business and investment decisions with evidence.

Many methods have been developed to simplify the decision making process. In this paper, the rational model of decision making will be discussed first. Then, some of the factors that cause deviation in the rational

Decision making is the most important aspect of any matter one confronts in the physical world. The success or failure of a project, business, operation, company etc. is directly proportional to the logical reasoning carried out to reach a decision. Bad/ suboptimal decisions can ruin/damage business, project, reputation and careers. Past few decades of research into the decision making paradigm has highlighted that bad decisions are a byproduct of distortions and biases that incapacitate our reasoning. Most of our decision making is heuristic in nature that serves perfectly well in most of the situations. However, when the problem is large enough, one tends to ignore or poorly identify the details that must be taken into account in order

Rational choice paradigm of decision making: the view in decision making that people should and typically do, use logic and all available information to choose the alternative with the highest value.