472NOT01.DOC September 8, 1996 Rational Decision-Making: Efficiency Of Choice And Reasonableness Of Estimates 1. Are Decision-Makers Crucial, And If So, Does It Matter If They Are Rational? Three Levels Of Analysis: International System, National, Individual Decision-Maker. If International System Or National Levels, Leaders Less Important. If Individual Level, Then Leaders More Important. International System And National Environment Of Leaders Constrain Them To Make Choices And Lessen Their Own Importance. In The Context Of A Tight Bipolar Cold War International System, Leaders Have Fewer Degrees Of Freedom Than In A Loose, Multipolar System. But Leaders Do Make A Difference, And The Degree Of Rationality Is Important. If Leaders Are To Be Held Responsible For Their Actions, They Must Be Capable Of Rational Action. If Saddam Hussein Is So Damned Insane, Can Be Held Accountable For His War Crimes? Rationality Is A Prerequisite For Responsibility. Cognitive Psychologists Argue That Rationality Is Not Generally The Dominant Mechanism Of Choice. Human Capacity For Complex Calculation And Reasoned Argument Constrained By Cognitive Structures. Decision-Makers Diagnose Problems, Draw Inferences, Examine Alternatives, And Make Choices Through Mechanisms That Bear Little Resemblance To Comprehensive Rationality. Evaluation Of Efficient, Static Choice If Because Of Constraints, Leaders Cannot Choose The Best Available Means Given Their Ends, They Are Not Subjectively Efficient. Decision-Makers Are Rational If They Choose The Most Efficient Choice--That Alternative That Promises The Highest Expected Value, Either Highest Benefit Or Lowest Loss. Identify Options, Estimate Likelihood Consequences Of Options, Consider Cost, Benefit, And Likelihood Of Success, Trade Off Expected Cost And Benefit To Establish Expected Value. Then Select Option That Promise Highest Gain Or Lowest Loss. Rational Procedures Should Yield Expected Value Maximizing Outcomes Over The Long Run. Scorpion And Frog And The Jordan River. Scorpion Asked For A Ride, Frog Considered The Likely Consequences Of Options And Said Yes. But First Frog Said, If I Give You A Ride, You May Sting Me And Well Both Drown. The Scorpion Assured The Frog That Such Action Was Unlikely Because His Goal Was To Reach The Other Side Safely. Reassured By The Additional Information, The Frog Agreed, And They Began The Trip. Halfway Across, The Scorpion Stings The Frog, Causing Both To Go Down. Why? Asked The Frog. The Scorpion Replied, You Dont Understand: This Is The Middle East. Cant Evaluate Quality Of The Decision By The Outcome Of Death. The Unsatisfactory Outcome Did Not Flow From Poor Decision -Making Procedures. The Frog Considered Options, Estimated Consequences, And Selected The Efficient Option. Frogs Death The Result Of Action Of The Scorpion, Ho Alluded To Other Premises The Explain The Choice. Even If You Select The Expected Value-Maximizing Option, That May Not Result In A Preferred Option Being Achieved. Is Monday Morning Quarter-Backing Fair? In Evaluating Historical Choices, Only Use Information And Values Of Leaders At The Time Of Choice Not Data Discovered After The Fact. Can You Be Evil And Rational? Yes, The Rationality Of An Individual Is Independent Of Values They Hold And Pursue. In Evaluating Rationality Of Choice, Is It Reasonable To Be Critical Of The Purposes Of Leaders? No! Ok To Take Into Account The Risk Propensity Of Leaders. If You Know That One Group Places Emphasis On Costs And Tries To Avoid Loss, Then You Should Expect Them To Choose The Risk Averse Option. Another Group May Wish To Focus On Possible Gain, And They Should Choose The Risk Acceptant Option. Evaluation Of The Reasonableness Of Estimates Dynamic Process Of Choice Requires Monitoring Of Changes In The Environment And Updating The Likelihood Of Uncertain Outcomes. Rational Process Of Estimation Conforms To The Norms Established By Scientific Practices For Management Of Evidence. Gross Deviations From Accepted Norms Is Indicative Of Lack Of Rationality. Retention Of Organizing Assumptions In Light Of New Evidence Indicates Deviation From Rationality. Are Decision-Makers Too Radical In Their Processing Of Information? Yes, But Do They Give Recent Information Too Much Weight In Revising Earlier Judgments. No! Decision-Makers Are Too Conservative In Their Judgments. They Tend To Pay Too Little Attention To New Information And Resist Rather Than Exaggerate. Were Leaders Aware Of Ambiguity Or Contradiction In The Information Given To Them? Did They Seek Additional Information To Clarify Ambiguity? Did They Consider More Than One Interpretation Of Evidence? Did They Consider The Validity Of Observed Indicators? Did They Use Probabilistic Or Categorical Language In Describing The Environment? In An Ambiguous And Complicated World, Were They Skeptical Or Certain? Were They Aware Of Biases In Information Processing? Information Uncertainty And Value Complexity Decision-Making Involves Reduction In Uncertainty And Simplification Of Complexity. Analytic Decision-making: Comprehensive Search, Optimal Revision, Complete Evaluation, Value Maximization. Cognitive Decision-Making: Constrained Search, Sub-Optimal Revision, Incomplete Evaluation, And Single Value Choice Via Analogy, Beliefs.