The contribution of activity theory to modeling multi-actor decision-making: A focus on human capital investments

Abstract

Making investment decisions is usually considered a challenging task for investors because it is a process based on risky, complex, and consequential choices (Shanmuganathan, 2020). When it comes to Investments in human capital (IHC), such as startups fundings, the aspect of decision-making (DM) becomes even more critical since the outcome of the DM process is not completely predictable. Indeed, it has to take into consideration the will, goals, and motivations of each human actor involved: those who invest as well as those who seek investments. We define this specific DM process as multi-actor DM (MADM) since not a group is making decisions but different actors, or groups of different actors, who – starting from non-coinciding objectives – need to reach a mutual agreement and converge toward a common goal for the success of the investment. This review aims to give insights on psychological contributions to the study of complex DM processes that deal with IHC to provide scholars and practitioners with a theoretical framework and a tool for describing the complex socio-ecological systems involved in the DM processes. For this purpose, we discuss in the paper how the third generation of activity theory (Leont’ev, 1974, 1978;Engeström, 1987, 2001) could be used as an appropriate model to explain the specificities of MADM construct, focusing on the particular case of startup funding. Design thinking techniques will be proposed as a methodology to create a bridge between different activity systems.

From service design thinking to the third generation of activity theory: a new model for designing AI-based decision-support systems

“…The other tool we adopted for data collection is the Strategic Organizational Counseling ( Talamo et al, 2021 ; Marocco et al, 2023a , b ). This methodology, developed by the IDEaCT Social Lab of Sapienza University, assists organizations in developing services and facilitating organizational processes necessary for the success of the service.…”

“…Once the analysis is complete, SDT tools can be created. To create the MADM model and support the development of Multi-Actor DSS, a specific selection of tools can be chosen, including the Empathy Map ( Bland, 2016 ), Personas ( Osterwalder and Pigneur, 2013 ), Activity Diagram ( Young, 2008 ), MADM flow 6 ( Marocco et al, 2023b ) that is an adaptation of the User Journey Maps 7 ( Stickdorn and Schneider, 2011 ), and the Organizational DM flow ( Marocco et al, 2023a , b ) that emerges from the Strategic Organizational Counseling.…”

“…This last step focuses on bridging the users and providers by aligning their activities and DM processes within the MADM model. The MADM model ( Marocco and Talamo, 2022 ), based on the third generation of AT ( Engeström, 2001 ), offers a comprehensive and holistic framework that captures the specificities and conditions that influence each actor’s DM process and impacts the creation of interobjectivity. To address this challenge, we provide detailed instructions to integrate the different components of a single activity diagram, starting from the specific DT tools used during this process (see Marocco et al, 2023b ).…”

“…Due to the complex and multi-layered nature of DM in the field of IHC ( Marocco and Talamo, 2022 ), we believe it is more beneficial to adopt the third generation of AT as proposed by Engeström in 2001 ( Figure 1 ). This expansion specifically addresses the challenge of developing “conceptual tools to understand dialogue, multiple perspectives, and networks of interacting activity systems” ( Engeström, 2001 , p. 135).…”

“…Moreover, psychological research has been extensively applied to study various psychological phenomena in DM using quantitative tools. However, this approach has presented several limitations, including an imbalance in the prevalence of studies, with a focus on analyzing individual DM processes, or the frequent perception of humans as carriers of biases and distortions ( Marocco and Talamo, 2022 ). Hence, we recognized the need for a different approach, that views activity systems as the primary unit of analysis.…”