Understanding Rational Decision-Making in Virtual Collaborations

2.1 Rationality in Decision-Making

Rationality has been a key determinator in decision-making and has been supported by multiple studies, especially the classic “Bounded Rationality” model, which claims that rationality and irrationality co-exist in decision-makers and the allocation of the two can vary (Simon, 1957).

The bounded nature of rationality means that decision-makers can optimize the outcome by deploying more rationality and excluding the irrationality (Alkaraan, 2013). Rationality in this context refers to the utilization of predetermined tools such as financial analysis to justify the decision, while irrationality is the utilization of personal or psychological factors (Alkaraan, 2013). A decision-making process under bounded rationality is dominated by the ability of the decision-maker to process a significant amount of information, and when the information processing has become overwhelming, individuals tend to rely on personal experiences and preferences, thus causing deviation from the optimized outcome (Wall, 1993).

The concept of “rationality” has received extremely limited attention in the existing VT literature. Indeed, the mechanism of bounded rationality indicates a pipeline where rationality can predominate if irrationality is prevented (Simon, 1957). Based on this bounded rationality model, VT members tend to be less emotionally involved and a “neutral” state can be promoted via VT collaboration (Straus, 1996). Nonetheless, does it imply that VT collaboration directly contributes to rational decision-making? Such a relationship is seldom evident in the existing literature.