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Reason, Intuition, and Time
Author(s) -
Sahm Marco,
Weizsäcker Robert K.
Publication year - 2016
Publication title -
managerial and decision economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.288
H-Index - 51
eISSN - 1099-1468
pISSN - 0143-6570
DOI - 10.1002/mde.2711
Subject(s) - intuition , decision process , decision theory , economics , computer science , microeconomics , operations research , mathematical economics , management science , epistemology , philosophy , mathematics
We study the influence of reason and intuition on decision‐making over time. Facing a sequence of similar problems, agents can either decide rationally according to expected utility theory or intuitively according to case‐based decision theory. Rational decisions are more precise but create higher costs, though these costs may decrease over time. We find that intuition will outperform reason in the long run if individuals are sufficiently ambitious. Moreover, intuitive decisions are prevalent in the early and late stages of a learning process, whereas reason governs decisions in intermediate stages. Examples range from playing behavior in games like chess to professional decisions during a manager's career. Copyright © 2015 John Wiley & Sons, Ltd.