Abstract for: Modeling Judgment and Decision Making Process Using System Dynamics
We argue that System Dynamics modeling process, during its conceptualization to the model evaluation and to policy experimentation phases, removes the criticisms to rationality view of Judgment and Decision Making (JDM) and implicitly considers the psychological factors. The criticisms of rational theory of JDM are basically due to the limitation of cognitive ability of the decision maker to perceive the complexity of the context, to the imprecise and imperfect idea about the factors influencing, to the using of simplified decision and choice selection rules, and to the personality of the decision makers, i.e. developing perception, getting biased, and managing risks. We argue that the philosophical origin and prescribed modeling processes of System Dynamics takes care of the limitations to rational decision making processes and captures the effect of psychological factors in the model. We have illustrated few System Dynamics models of how the Decision Traps, often described by the integrated JDM literature, are formed and how are the behavior of decision maker’s decisions. We conclude that System Dynamics models can be developed with ease to explain the JDM situations by rigorously following the suggested steps of the modeling process integrating economic theories with the psychological (Cognitive and Emotional) factors.