Influence of Participants’ Hyperbolic Discounting on Collective Decision-making: Development of Double Garbage Can Model and simulation

Abstract

The purpose of this research is to clarify the decision-making processes and influential factors of organizations. Human beings make decisions to avoid bounded rationality, however, decision failures are repeated even in organizations. Recently, research of behavioral economics reveals individual anomalies gradually. Hyperbolic discounting means a subjective time discounting rate that tends to decrease from the near future to the distant future. And explain the irrational human behavior of preferring short-term utility at the expense of long-term utility. In this paper, we propose a Double Garbage Can Model, which is an extension of the Garbage Can Model, which is a collective decision-making model under ambiguity, and simulate the influence of individuals with hyperbolic discounting on collective decision-making. As a result, hyperbolic discounting suggests a negative impact that can lead to collective decision-making that prioritizes short-term profits, while also suggesting a positive impact such as avoiding situations where nothing can be decided.