Psychological Cost And Its Valuation In Decision-Making Process

Choice has special meaning for modern people, which determines the development of society, the change of history and the life of individual. The research on choice and decision is an important field in psychology, because decision-making is a cognitive process related to emotion and feeling. Choice often means to compare different options and gain maximal benefit at minimal cost. This thesis takes psychological factors as a kind of cost which should be considered in decision-making process.The thesis firstly reviews some important theories and models on decision-making such as expected utility theory, modern cognitive decision-making theory and prospect theory. Early researchers didn't give much concern on emotions and feelings in decision process, but high on normative models. After H.Simon advanced that people often searched a satisfying choice but not a best choice by the reason of bounded rationality, researchers began to pay attention to the emotion influence on decision-making. Based on cognitive psychology, Kahneman and Tversky developed prospect theory and began to analyze decision process by descriptive model. Through those theory reviews on decision-making, we can find that researcher more and more attach importance to the psychological factors in decision process.Based on those decision theories, the thesis begins to discuss the main topic------psychological cost. People must understand fully their decision cost and income when they evaluate the decision reasonable. Besides, people have a tendency of loss aversion compared to gain seeking, since loss has more influence on people than gain. This thesis thinks that psychological cost is a kind of emotion suffering or personality loss as the necessary payment of something gained or as the unavoidable result or penalty of action. The psychological cost has some characters as follows: (1) psychological cost is difficult to be aware for its immateriality; (2) psychological cost is inconstant according to different persons and situations; (3)psychological cost can come into being at different phases in decision-making process; (4)psychological cost is independent variable as well as dependent variable.The influence factors to psychological cost are cognitive conflicts on account of cognitive appraisement, individual value or preference, cognitive frame and so on. Psychological cost often comes into being in such circumstances: (1)how to make a tradeoff between different options; (2)how to make a choice between society criterion and individual desirability when facing conflicts; (3)how to perceive risk and how to respond to risk; (4)how to deal with the sunk cost.The value judgment of psychological cost has special characters different from economic calculation and psychological measurement. According to the present psychology methods of value judgment on utility, value function and mental accounting, the thesis thinks that the value judgment of psychological cost is a dual process with calculation valuation and feeling valuation. In the thesis, two problems on psychological cost assessment are discussed, which are reference point and time as value scale. In addition, the significance of leisure time in modern society is also discussed.Generally, as a kind of negative emotion, we should reduce psychological cost as little as possible. We can take two strategies------order strategy and rank strategy. Order strategy means to reduce conflicts and mental resource waste through order mechanism for low psychological cost. Order mechanism can be realized through some systems and traditions. Rank strategy means to distinguish important or unimportant options by different comparison standards,consequently psychological cost can be changed.Psychological cost extends the original concept of cost, and enriches the content of decision-making theory. Based on two original criterions----- effort minimization and accuracy maximization, we develop a new criterion-----negative emotions minimization to help people make a better decision. At the same time, we still have some problems such as assessment method to solve and improve.