At least two procedures are used in decision making
, choosing between possible solutions to a problem.
In the compensatory process, all possible solutions are evaluated based on certain desirable features, which may overshadow certain undesirable ones.
In the noncompensatory process, possible solutions are eliminated in a step‐by‐step process based on how well they meet all criteria—for example, cost, availability, and longevity.
Risky decisions are those made in the face of considerable uncertainty about the outcome of the decision. For example, although statistically the odds of winning a lottery are small, people still make the risky decision to participate. If they calculated the probability that their lottery ticket would be the winning one, the risk would be clear, but such decisions often rest on other than logical bases. Deciding to buy or not buy the lottery ticket can be affected by the way the decision maker frames the choice: “Oh, you spend only a dollar a week on the lottery, but you may make millions” vs. “For the $52 a year the lottery costs, I could buy some decent shoes; the chances of winning are only one in two million anyway.”