Final choice will maximize economic payoff. B. Limits to rationality. Unfortunately, most decisions that managers face don't meet all the tests of rationality. Studies into the decision-making process have uncovered some important insights. There are limits to an individual's information processing capacity.
Decision makers tend to intermix solutions with problems.
Perceptual biases can distort problem identification. Many decision makers select information more for its accessibility than for its quality. Decision makers tend to commit themselves prematurely to a specific alternative thereby biasing the process towards that alternative. An escalation of commitment can be fostered if there is evidence that a previous solution is not working. An escalation of commitment is an increased commitment to a previous decision despite evidence that it may have been wrong.