Decision theory is theory about decisions.

Theoretical questions about decisions

The following are examples of decisions and of theoretical problems that
they give rise to.
Shall I bring the umbrella today? The decision depends on
something which I do not know, namely whether it will rain or not.
I am looking for a house to buy. Shall I buy this one? This
house looks fine, but perhaps I will find a still better house for the
same price if I go on searching. When shall I stop the search
procedure?
Am I going to smoke the next cigarette? One single cigarette is
no problem, but if I make the same decision sufficiently many times
it may kill me.
The court has to decide whether the defendent is guilty or not.
There are two mistakes that the court can make, namely to convict
an innocent person and to acquit a guilty person. What principles
should the court apply if it considers the first of this mistakes to be
more serious than the second?
A committee has to make a decision, but its members have
different opinions. What rules should they use to ensure that they
can reach a conclusion even if they are in disagreement?

Almost everything that a human being does involves decisions. Therefore,

to theorize about decisions is almost the same as to theorize about human
activitities. However, decision theory is not quite as all-embracing as that.
It focuses on only some aspects of human activity. In particular, it focuses
on how we use our freedom. In the situations treated by decision theorists,
there are options to choose between, and we choose in a non-random way.
Our choices, in these situations, are goal-directed activities. Hence,
decision theory is concerned with goal-directed behaviour in the presence
of options.
We do not decide continuously. In the history of almost any activity,
there are periods in which most of the decision-making is made, and other
periods in which most of the implementation takes place. Decision-theory
tries to throw light, in various ways, on the former type of period.

A truly interdisciplinary subject

Modern decision theory has developed since the middle of the 20th century
through contributions from several academic disciplines. Although it is
now clearly an academic subject of its own right, decision theory is
typically pursued by researchers who identify themselves as economists,
statisticians, psychologists, political and social scientists or philosophers.
There is some division of labour between these disciplines.
A politicalscientist is likely to study voting rules and other aspects of
collectivedecision-making.
A psychologist is likely to study the behaviour ofindividuals in decisions
A philosopher the requirements for rationalityin decisions.
However, there is a large overlap, and the subject has gained from the
variety of methods that researchers with different backgrounds have applied
to the same or similar problems.
Normative and descriptive theories
The distinction between normative and descriptive decision theories is, in
principle, very simple. A normative decision theory is a theory about how
decisions should be made, and a descriptive theory is a theory about how
decisions are actually made.
The "should" in the foregoing sentence can be interpreted in many
ways. There is, however, virtually complete agreement among decision
scientists that it refers to the prerequisites of rational decision-making. In
other words, a normative decision theory is a theory about how decisions
should be made in order to be rational.
This is a very limited sense of the word "normative". Norms of
rationality are by no means the only or even the most important norms
that one may wish to apply in decision-making. However, it is practice to
regard norms other than rationality norms as external to decision theory.
Decision theory does not, according to the received opinion, enter the
scene until the ethical or political norms are already fixed.
It takes care of those normative issues that remain even after the goals have
been fixed.
This remainder of normative issues consists to a large part of questions
about how to act in when there is uncertainty and lack of information. It
also contains issues about how an individual can coordinate her decisions
over time and of how several individuals can coordinate their decisions in
social decision procedures.
If the general wants to win the war, the decision theorist tries to tell

him how to achieve this goal. The question whether he should at all try to
win the war is not typically regarded as a decision-theoretical issue.
Similarly, decision theory provides methods for a business executive to
maximize profits and for an environmental agency to minimize toxic
exposure, but the basic question whether they should try to do these things
is not treated in decision theory.
Although the scope of the "normative" is very limited in decision
theory, the distinction between normative (i.e. rationality-normative) and
descriptive interpretations of decision theories is often blurred.
It is not uncommon, when you read decision-theoretical literature, to find
examples of disturbing ambiguities and even confusions between normative
and descriptive interpretations of one and the same theory.
Probably, many of these ambiguities could have been avoided. It
must be conceded, however, that it is more difficult in decision science
than in many other disciplines to draw a sharp line between normative and
descriptive interpretations.
DESCRIPTIVE THEORIES
Descriptive theories, naturalistic and behavioural in nature, originate from the philosophies
and professions of psychology and behavioural science [2]. Specifically, descriptive theories
are interested in understanding how individuals actually do make judgments and decisions.
Descriptive theories place no restriction on whether the individual is rational and logical or
irrational and illogical, and seek to understand how individuals make judgments and
decisions in the real world, focusing on the actual conditions, contexts, ecologies, and
environments in which they are made [1]. Irrationality in this context refers to instances
where individuals have not given any thought to the process of judgment or decision-making,
and, even if they have, are unable to implement the desired process [2]. These theories seek
to understand the learning and cognitive capabilities of ordinary people and aim to
determine if their behaviour is consistent rational [2]. Context, interactions, and ecology
are central to the interpretation and study of descriptive JDM theory.
Arguably the most influential and frequently used descriptive theory or model used in nursing
and the midwifery is that of information processing theory (IPT) [29]. Information
processing theory, also referred to as hypothetico-deductive approach, suggests that human
judgment and the reality of reasoning are bounded and limited to the capacity of the human
memory [29]. IPT suggests that individuals, in making decisions, go through a number of
stages that are guided predominately by the acquisition of cues from the environment [1].
Many authors have proposed variations of essentially the same phenomena with this theory
[20, 30-32]. Descriptive models and theories of JDM place significant emphasis on
investigating, heuristics, uncertainty, biases, and error in JDM. Heuristics are simplifying
strategies or rules of thumb used to make decisions, and make it easier to deal with
uncertainty and limited information. Thompson and Dowding [1] describe a number of
categories of heuristics. Availability heuristics base decisions on recent events that relate to
the situation at hand. Representativeness heuristics base a decision on similarities between
the situation at hand and stereotypes of similar occurrences [26]. Anchoring and adjustment

heuristics base a decision on incremental adjustments to an initial value determined by

historical precedent or some reference point. Although useful when dealing with uncertainty,
heuristics often lead to systematic errors that affect the quality and/or ethics of decisions [1].
Descriptive theories as methods of inquiry have been applied to multiple professions for
nearly half a decade. Large bodies of descriptive theory research have been conducted,
particularly in the nursing profession [1, 33]. A distinct feature of descriptive theories is that
they are not concerned with the quality of the judgment or the outcome of the decision in any
qualitative way. How the individuals arrive at a judgment or decision, regardless of how
good or bad it may be, is paramount. Evaluation of judgments and decisions within this
philosophy is based on the empirical validity or extent to which the model observed
corresponds to the observed choices in the judgment or decision.
NORMATIVE THEORIES
Normative theories of JDM, classical and positivist in nature, were born from the statistical,
mathematical, and economic philosophies [2]. In this domain, researchers (often referred to
as decision theorists) seek to propose rational procedures for decision-making that are logical
and may be theorised. The focus of normative theory is to discover how rational people
make decisions with the aim of determining how decisions should be made in an ideal or
optimal world, where decisions are based on logical and known conclusions supported by
clear or probable evidence. Normative theories, often based on statistics and probabilities
within the positivist domain, propose to evaluate how good judgments should be made and
how good outcomes should be achieved [1]. Normative theories give little or no
consideration to how judgments are made by ordinary people in reality and everyday
3
Shaban: Theories of clinical judgment and decision-making: A review of th
Published by Research Online, 2005

Journal of Emergency Primary Health Care (JEPHC), Vol.3, Issue 1-2, 2005
Author(s): Ramon Shaban

practice, and place little or no emphasis on the context or ecology of the judgment [2]. They
are concerned only with optimal conditions and environments, and assume that decision
makers are superrational [34], with little or no emphasis on how JDM occurs in the real
world.
Expected utility theory (EU) and subjective expected utility theory (SEU) are the
normative approaches of choice, often referred to as the gold standard for optimal
decisionmaking.
Subjective expected utility theory is a normative approach that takes into account
the decision-makers values or beliefs in a rational context and calculates the probability of
various outcomes occurring before identifying the optimum decision for that individual [3].
Multi-attribute utility theory is the normative theory of decision-making with multiple
goals. A common normative approach to JDM is Bayes Theorem for Judgments. A central
tenant of normative theories is the assessment and explication of risk. In order to determine
how judgments and decisions should be made, comprehensive risk analysis must be
undertaken and all possible risks are explicated and weighted [1]. Decision analysis is the
direct implementation of these theories to specific decisions. Decision analysis and the use of
decision trees based on the predicability of event probability and statistics occurrence is
commonly used to assist in JDM in medicine [1]. Clinical decision analysis uses techniques
to make the decision-making process explicit by breaking it down into processes and

components so the effect of different observations, actions, probabilities, and utilities can be
analysed [21]. Decision trees work by breaking down problems into smaller decisions and
choices and adding numerical values such as the probability of the events to each part of the
decision. Once each choice has been assigned a probability, based on the assumption that
this is possible, the option with the highest utility for the decision maker can be calculated
[1]. Often referred to as expected utility theory, the model attempts to quantify the
probability of the most likely and most desirable event in an attempt to assist the individual or
group in making that judgment or decision by making it known. Decision analysis has been
applied in multiple settings [1]: assisting women to make decisions to continue with a
pregnancy with risk of Downs Syndrome in childbirth [1, 35], and deciding on the types of
intervention that should be used for psychiatric patients with violent tendencies [36].
Chapman and Sonnenberg [3] criticise the use of decision analysis in instances where
probabilities are based on cultural or societal norms from areas and locations outside of the
use area.
Judgment and decision-making in the context of uncertainty, stress, and social policy has
been the focus of much of the work of Hammond [10, 23] and many others. Large bodies of
statistical and probabilistic theory, such as Bayes Theorem, seek to manage or redress this
uncertainty and stress in judgment making. Reason [37]and Vincent [38] have examined
errors and slips in JDM, proposing that human error is based on one or more of, or a
combination of, skills-based failure, rule-based failure, and failure at knowledge-based level.
They and others have examined the use of rule-applications processes in an attempt to limit
bias and error in JDM [39, 40]. Risks assessments, tools, scales, and measurements have
been in use in medicine for years and are prolific in the medical, psychological and scientific
literature [1]. Such instruments seek to quantify risk and, in doing so, aim to make all risks
known.
A major criticism of normative theoretical approaches is that they fail to capture the reality of
most decision situations in heath-care, particularly in nursing, that are characterised by
incomplete knowledge of all available alternatives, a lack of reliable probabilistic data of the
consequences of these alternatives, and few readily acceptable techniques for reliably
gauging patient utility [41]. Normative theories rely on the quantification of risk in complete
and known ways, which many have argued is not possible [1, 3]. Hastie and Dawes [42]
suggest that good decisions are those in which the process follows the laws of logic and
probability theory. Others have argued that it is not possible to identify, assign relative
probabilistic weight to, and account for all aspects of risk, particularly in medicine and health
care [10, 23, 25]. Attempts to do so provide an analysis that is only valid for one point in
time with significant, unrepresented, and unaccounted bias

Decision-making is a component in management

that

has to be

understood and executed. How does a nurse manager arrive at a sound

decision? What important steps must be taken? What are the types of
decision that a nurse manager makes and how does this affect the health

care delivery system? Integrate the ethical principles as you discuss the
decision-making process.

Decision-making is a systematic, sequential process of choosing among

alternatives and putting the choice into action. Decision making is a continuing
responsibility of nurse managers. Nurse Manager can arrive at a sound decision by
having a mature sense of judgment and good problem solving skills. Problem
solving is a skill that can be learned, and because staff nurses can learn by
observing their leaders, good decision making by the leader may do more than
solve immediate problems; more important for the long term, it can foster good
decision making by the staff nurses.
Decision making relies in the scientific problem-solving process: identifying
the problem, analyzing the situation, exploring alternatives and considering their
consequences, choosing the most desirable alternative, implementing the decision,
and evaluating the results.
The first step is the decision-making process is defining the problem. What
is wrong? When is improvement needed? It is important to define the factors that
cause the problem. Example, an employee repeatedly reports late to work or abuses
the privilege of sick leave, the nurse manger can respond in accordance with
agency policies. However, managers who are concerned only with the infarction
maybe dealing with the effect rather than the cause of the problem. The ethical
principle here is autonomy and responsibility, that the employee has the right to
explain or determine the course of action and should have been responsible by
executing his/her duties. Proper judgment should be applied by the manager. If ever
the employee has reasonable cause for his/her action justice should also be applied
to him/her/.
The second step is to explore the alternatives. If various alternatives is
not explored, the course of action is limited. When solving a problem, managers
should determine first whether the situation is covered by policy. If it is not, they
must draw on their education and experiences for facts and concepts that will help
them determine alternatives. The more experience the manager has had, the more

alternatives may be suggested to solve a variety of problems. But if experiences is

not adequate and not the solution to the problem, managers should look beyond
their own experiences and learn how others are solving similar problems. This can
be done through continuing education, professional meetings, and review of
literature, correspondence, and brainstorming with staff. The ethical principle here
is competence by having the necessary skills or experiences necessary to perform a
task or solve a problem. Advocacy may also be applied by sharing the information
needed as alternative to come up with a good decision.
The third step is to choose the most desirable alternative. One alternative is
not always clearly superior to all others. The manager must try to balance factors
such as patient safety, staff acceptance, morale, public acceptance, cost, and risk of
failure.

The

ethical

principles

here

are

beneficence

and

nonmaleficence.

Beneficence promotes taking positive active step to help others. The decision
should be to do good to others. And Nonmaleffiecnce is to do no harm.
The fourth step is to implement the decision. A decision that is not put into
action is useless. The manager will need to communicate the decision to
appropriate staff associates in a manner that does not arouse antagonism. The
decision and procedures should be explained to win the cooperation of those
responsible for its implementation. The ethical principle here is principle of respect
of person. Respect is necessary in dealing with different kinds of people especially if
youre suggesting something or coming up with a decision in a certain issue.
The final step of decision making is evaluation of the results of the
implementation of the chosen alternative. Evaluative criteria may have to be
developed. Audits, checklist, ratings, and rankings can be used to review and
analyze the result. Sometimes solution to old problems creates new problems,
making & evaluating additional decisions may be required. The ethical principle
here is beneficence which is to do good and nonmaleficence to do to harm in every
decision we make.
The decision-making and problem-solving models and the nursing process are
very similar. They are all scientific problem solving.
References:

Ann Marriner-Tomey (2005) Guide to Nursing Management and Leadership: Elsevier

(Singapore) PTE LTD.
Sven Ove Hansson (2005) Decision Theory A brief Introduction