decision theory

Model Perspective

Apr 22, 2025 · Artificial Intelligence

What Are Herbert Simon’s Four Decision-Making Models and Why They Matter

The article reviews Herbert Simon’s four influential decision‑making models—Subjective Expected Utility, Behavioral, Intuitive, and Darwinian—explaining their key features, applications, and limitations, and shows how they illuminate rational and adaptive choices in economics, psychology, and organizational behavior.

Bounded RationalityDarwinian ModelHerbert Simon

0 likes · 9 min read

What Are Herbert Simon’s Four Decision-Making Models and Why They Matter

Model Perspective

Apr 19, 2025 · Fundamentals

How Kahneman’s Final Decision Sheds Light on Human Rationality Limits

Daniel Kahneman, Nobel laureate and father of behavioral economics, chose assisted dying in March 2024, a personal decision that underscores his lifelong insights into human irrationality, as his prospect theory and dual‑system model continue to shape economics, psychology, AI, and decision‑making across fields.

Prospect Theorybehavioral economicscognitive bias

0 likes · 13 min read

How Kahneman’s Final Decision Sheds Light on Human Rationality Limits

Model Perspective

Mar 21, 2024 · Fundamentals

How the “Maximum Regret Principle” Guides Decision‑Making: A Mathematical Model Explained

The article introduces Zhang Ruimin’s “maximum regret principle,” explains its mathematical formulation using regret matrices and utility functions, and demonstrates its application through a concrete investment decision example that shows how minimizing the worst‑case regret leads to robust choices.

Risk Managementbusiness strategydecision theory

0 likes · 5 min read

How the “Maximum Regret Principle” Guides Decision‑Making: A Mathematical Model Explained

Model Perspective

Jan 6, 2023 · Fundamentals

When to Stop Searching? Unveiling the 37% Rule with Simulations

This article explores the classic optimal‑stopping (secretary) problem through a philosophical story, mathematical analysis, Python simulations, and a proof that the best strategy is to reject roughly the first 37 % of candidates, yielding about a 40 % chance of selecting the optimal option.

37% ruledecision theoryoptimal stopping

0 likes · 11 min read

When to Stop Searching? Unveiling the 37% Rule with Simulations

Model Perspective

Jul 11, 2022 · Operations

Deterministic vs. Stochastic Decisions: Mastering Time Value of Money Calculations

The article explains the distinction between deterministic and stochastic decision-making, outlines common operations‑research methods such as linear and nonlinear programming, and details cash‑flow concepts and the mathematical formulas for compound interest, present and future values, annuities, and capital recovery and storage factors.

cash flowdecision theoryoperations research

0 likes · 6 min read

Deterministic vs. Stochastic Decisions: Mastering Time Value of Money Calculations