The assumptions of rational decision making are:

(A) Preferences are not clear

(B) Preferences are not constant and stable

(C) Problem is clear and unambiguous 

(D) No time or cost constraint exist

(E) Final choice will maximize pay off

Choose the correct answer from the options below:

The correct answer is (C), (D), (E) only

Key Points

•  Rational Decision making refers to the process wherein decision makers reasonably go through by the various steps and select the optimum/ best solution to a given problem.
• It entails the capacity to assist the decision-maker by making the relevant information accessible and specific, which is made possible by the choice to make logical decisions.
• Making decisions will help to proceed in an organized manner from problem to solution.
• Utility is the goal of rational decision-making.
• When making a sensible/ rational decision, structured questions are used to encourage in-depth investigation of the  issue that has to be solved.
• The assumptions of rational decision making are:
  • ​An individual has cognitive ability to evaluate each alternative.
  •  Problem is clear and unambiguous 
  • There is no time or cost constraint exist
  • Final choice will maximize pay off

Hence, the correct answer is (C), (D), (E) only.