Babiera, Roliel E.

EDUC 206
Prof: Dr. Nick Pañares

February 11, 2023

Compare and contrast Normative Decision Theory and Optimal Decision

Theory.

Decision theory is a general approach to decision-making when the

outcomes associated with alternatives are often in doubt. It is the study of a person
or agents’ choices. The theory enables us to comprehend the reasoning behind the
decisions. The decisions have implications and are typically examined in two
distinct but linked branches. The branches consist of Normative Decision Theory
and Optimal Decision Theory.

Normative Decision Theory is about how we should make decisions or how to

make an optimal decision. It analyzes the outcomes of decisions. It determines the
optimal decision based on outcomes. Moreover, it is concerned with the
identification of optimal decisions where optimality is often determined by
considering an ideal decision-maker who is able to calculate with perfect accuracy
and is in some sense fully rational. Thus, this theory centers around the ideal
decision-maker for a specific situation. This is why how the participation of others
in decision-making should be considered and decided. But mostly, this type of
decision-making revolves around the control of the leader which usually falls under
autocratic leadership.

Meanwhile, the Optimal Decision Theory investigates and analyzes why

individuals and agents of choice make the decisions that they do. It looks at the
assumptions made by individuals making the decisions and the assumptions they
make when deciding. Furthermore, A decision that results in a known or predicted
outcome that is at least as good as any other option is considered to be an optimal
decision. Thus, this type of decision theory looks back on the key points that lead
to the decision.

The two types of decision theory are different, but they do have in common,
they analyze the factors that affect the decision. Both theories give emphasize the
relevance of the factors and key points that affect the decision. They both see how
important the process of decision-making. Likewise, these theories have an end
goal to picture why it is important to make a rational decision because decision-
making resonates with reasons and outcomes.