Behavioral Theories of Decision Processes

ORG517 Behavioral Theories of Decision Processes

  • Topics


    The course provides the students with an overview of normative and descriptive decision models that is highlighted from different theoretical points of departures and illustrated through theoretical analyses, experiments, and empirical studies. We will discuss issues about rationality from an individual and a collective point of view. One central concern is to give the students an understanding of assumptions of rationality and theoretical and practical consequences of not meeting these assumptions. The course also will focus on important methodological problems in studying decision making. We will analyze different phases of decision making, such as preference formation, information processing, the role of beliefs in decision making, choice, and implementation of decisions.

    The course emphasizes individual, group, and organizational decision making and risk taking. We will discuss the concept of rationality by examining behavioral, cognitive decision theory at the individual level, where we shall emphasize preference formation, framing, cognitive limits, heuristics and biases, risk, models of choice, and learning. We will treat special dynamics related to decision making in groups, organizations, and interorganizational settings. We will discuss methodologies that are used in research on decision making, and how to design and conduct research into this area. Finally, we will discuss how information processing and decision making enters different theories of human and organizational behavior.

    Who should take this course?

    Doctoral students interested in human and organizational behavior, decision making and limitations on human rationality; students who want to know how to research, evaluate and manage risk. We teach how people perceive risk and make choices, and how organizational settings influence decision making. Why do organizational activities go awry? How do decision makers respond to crises? Studying crises and decisions is one efficient way of learning from decisions that go wrong; if things do not go wrong, the causation may be unclear. This course is a good foundation for further studies of human behavior in the social sciences, because most theories have assumptions of human or organizational decision making to explain behavior. We also emphasize research methods, and how researchers can evaluate data and make rational judgements. The course will also teach the students how to formulate a research problem, and how to set up a design to test hypotheses.

  • Learning outcome

    Learning outcome

    The course provides the students with a broad and comprehensive perspective on different theoretical approaches to the study of individual, group, and organizational behavior with emphasis on cognition, information processing and decision making. During the course we will discuss conceptual and methodological problems related to research in decision making, as well as to the development of theories in the area of decision making. Decision making is important for building theories in the social sciences, since decision making is an important mechanism to understand social and organizational behavior. We will treat decision making at the level of the individual, group and organization as well as in interorganizational settings. The course also covers creativity and learning. We will go through a set of cases where the students will be asked to formulate research questions, propose theories and how to test propositions derived from the cases.

    Learning outcomes:

    The students will learn how to deal with assumptions of rationality and bounded rationality. They will learn how these are embedded in different theories, and what are the implications of rationality in behavioral theories. These are decision models based on the logic consequence.

    The students will learn how to distinguish normative and descriptive theories, and how these fit into different theories in organizational behavior.

    The students will learn how to deal with normative assumptions of rational decision making and information processes, and what are systematic biases in human cognition compared to rational models.

    The students will learn how people perceive and process information and make decisions under uncertainty, and how perception biases affect rationality. They will learn about commonly used heuristics and how these influence the understanding of social and organizational behavior.

    The students will learn how social structures influence decision making in social and organizational behavior, these are models based on a logic of appropriateness.

    The students will learn about different research strategies and designs in the study of information processing and decision making, and how to critically evaluate studies.

    The students will learn how to incorporate behavioral assumptions and mechanisms based on information processing and decision making into theories that are relevant for human and organizational behavior.


    Knowledge - The candidate...

    is in the forefront of knowledge within his/her academic field and masters the field´s philosophy of science, issues and methods

    can evaluate the appropriateness and application of different methods and processes in research.

    can contribute to the development of new knowledge, new theories, methods, interpretations and forms of documentation in the field

    Skills - The candidate...

    can formulate problems, plan and carry out scholarly research at a high international standard

    can handle complex academic issues and challenge established knowledge and practice in the field

    Competence - The candidate...

    can identify new relevant ethical issues and carry out his/her research with scholarly integrity

    can manage complex interdisciplinary assignments and projects

    can communicate research and development work through recognized Norwegian and international channels

    can participate in debates in the field in international forums

    can assess the need for, initiate and practice innovation

  • Teaching


    Intensive course, 45 hours, weeks 43 & 44 (22.10-26.10.2012 & 29.10-2.11.2012).

  • Requirements for course approval

    Requirements for course approval

    Course participation, presentations & discussions, and a term paper.


  • Assessment


    The term paper has to be finished and accepted by April 1 the following year. The first draft should be submitted by mid-February.

  • Grading Scale

    Grading Scale

    Grading: Pass or Fail

  • Computer tools

    Computer tools

    General skills, e-mail, file transfers, using the web, word processing, spreadsheets and statistical software.

  • Semester


    Autumn2012, tentatively weeks 43 and 44 (OCT 22-NOV 2) 


  • Literature


    Elster, Jon. 2007. Explaining Social Behavior: More Nuts and Bolts for the Social Sciences. Cambridge: Cambridge University Press.

    Hastie, Reid and Dawes, Robyn M. Rational Choice in an Uncertain World. The Psychology of Judgment and Decision Making. 2nd ed. London: Sage Publications, 2010.

    March, James G. A Primer on Decision Making: How Decisions Happen. New York: Free Press, 1994.

    Articles, I will provide articles as PDFs.


ECTS Credits
Teaching language
Spring, Autumn

Course responsible

Professor Arent Greve, Department of Strategy and Management