Judgment and Decision Making: Extrapolations and Applications

Administrative Science Quarterly, 1990

In recent years, the field of decision making has benefitted greatly from a renewed interest in how people face choices involving uncertain outcomes. Decision Making: Descriptive, Normative, and Prescriptive Interactions is a collection of outstanding articles that addresses the general topic of decision making from three different perspectives: (1) how people make decisions, (2) how "rational" people should make decisions, and (3) how less rational people, who aspire to rationality, might do better. The book brings together these different approaches to decision making, summarizes ongoing work in the field, and synthesizes research in the different areas.

1990

In recent years, the field of decision making has benefitted greatly from a renewed interest in how people face choices involving uncertain outcomes. Decision Making: Descriptive, Normative, and Prescriptive Interactions is a collection of outstanding articles that addresses the general topic of decision making from three different perspectives: (1) how people make decisions, (2) how "rational" people should make decisions, and (3) how less rational people, who aspire to rationality, might do better. The book brings together these different approaches to decision making, summarizes ongoing work in the field, and synthesizes research in the different areas.

Annual Review of Psychology, 1984

Early studies of intuitive judgment and decision making conducted with the late Amos Tversky are reviewed in the context of two related concepts: an analysis of accessibility, the ease with which thoughts come to mind; a distinction between effortless intuition and deliberate reasoning. Intuitive thoughts, like percepts, are highly accessible. Determinants and consequences of accessibility help explain the central results of prospect theory, framing effects, the heuristic process of attribute substitution, and the characteristic biases that result from the substitution of nonextensional for extensional attributes. Variations in the accessibility of rules explain the occasional corrections of intuitive judgments. The study of biases is compatible with a view of intuitive thinking and decision making as generally skilled and successful.

Journal of Behavioral Decision Making, 2003

Decision-makers are sometimes depicted as impulsive and overly influenced by 'hot', affective factors. The present research suggests that decision-makers may be too 'cold' and overly focus on rationalistic attributes, such as economic values, quantitative specifications, and functions. In support of this proposition, we find a systematic inconsistency between predicted experience and decision. That is, people are more likely to favor a rationalistically-superior option when they make a decision than when they predict experience. We discuss how this work contributes to research on predicted and decision utilities; we also discuss when decision-makers overweight hot factors and when they overweight cold factors.

This paper discusses how human decision makings deviate from normative models. Normative models tell about how people should make decisions, while descriptive models explain how people really make decisions. Both Expected Utility Theory and Prospect theory are selected to represent normative models and descriptive models, and several examples from prospect theory are discussed to show the violation of two fundamental axioms of Expected Utility Theory, which serves as indications of the systematic deviations of people’s decisions from normative models.

European Journal of International Security

This article offers an alternative conceptualisation of prudence as encompassing four normative components: reflective reasoning, experience, long-term well-being, and moderation. Prudence involves a pattern of reflective reasoning informed by experience in the pursuit of long-term well-being through moderate judgements and actions. This conceptualisation allows distilling a set of prescriptions for guiding deliberation and choice under uncertainty, which I name the Prudent Judgement Approach. An analysis of John F. Kennedy's deliberations at the start of the Cuban Missile Crisis uncovers evidence of prudent judgement and demonstrates the practical feasibility and value of this approach. Although the numerous cognitive and procedural sources of errors in decision-making under uncertainty are by now well understood, there are few prescriptive approaches for guiding the process of formulating judgements and making choices. This article shows how prudence can help improve the quali...

Frontiers in Psychology, 2014

Policy decisions should be rational but sometimes they are not. The same goes for policy advice, according to critics who use the word “rational” in particular ways. The task in this chapter is to build a concise yet nuanced account of rationality in policy decision making that counters shallower complaints while providing points of departure for deeper critical probing. The chapter begins by discussing implied links between policy analysis and science. It then explores the substantive and procedural dimensions of policy decision making, and the distinct roles of analysts and decision makers. It reviews progress in developing tools for rational policy analysis, confronts the normative divide between adherents of theoretical and practical reason, shows how public participation can augment the rationality of public decisions, and closes by noting that the status of rationality in public decision making is insecure.

2011

According to Karl Popper, we can tell good theories from poor ones by assessing their empirical content (empirischer Gehalt), which basically reflects how much information they convey concerning the world. "The empirical content of a statement increases with its degree of falsifiability: the more a statement forbids, the more it says about the world of experience." Two criteria to evaluate the empirical content of a theory are their level of universality (Allgemeinheit) and their degree of precision (Bestimmtheit). The former specifies how many situations it can be applied to. The latter refers to the specificity in prediction, that is, how many subclasses of realizations it allows. We conduct an analysis of the empirical content of theories in Judgment and Decision Making (JDM) and identify the challenges in theory formulation for different classes of models. Elaborating on classic Popperian ideas, we suggest some guidelines for publication of theoretical work.

Judgment is an element of decision-making that is of critical importance to both ethics and economics but remains underappreciated in both. In this paper, I describe one conception of moral judgment, drawn from the moral philosophy of Immanuel Kant and the legal philosophy of Ronald Dworkin, in which an agent weighs and balances the various moral duties and principles relevant to a choice situation in a way that maintains the integrity of her moral character. After explaining the foundations and uses of judgment in ethics, I discuss its importance to two areas of economic modeling, individual choice and policy-making, both of which can be enhanced by incorporating judgment alongside more basic ethical motivations and concerns.

2012

The field of decision making can be loosely divided into two parts: the study of prescriptive models and the study of descriptive models. Prescriptive decision scientists are concerned with prescribing methods for making optimal decisions. Descriptive decision researchers are concerned with the bounded way in which the decisions are actually made. The statistics courses treat risk from a prescriptive, by suggesting rational methods. This paper brings out the work done by many researchers by examining the psychological factors that explain how managers deviate from rationality in responding to uncertainty.

This essay revisits problems that Amos Tversky and I studied together many years ago, and continued to discuss in a conversation that spanned several decades. It builds on an analysis of judgment heuristics that was developed in collaboration with Shane Frederick .

Personality and Individual Differences, 2018

2018

In this paper, I criticize one of the core assumptions of “value-driven epistemology”: that a cognitive state of knowing is more valuable than the state of having just a true belief. This assumption is criticised in Section 2 mainly on the basis of a traditional view of rationality (rational choice theory), and reliabilism is defended against the argument that it fails to solve the so called “value problem”. As an alternative to the conception of cognitive states prevalent within value-driven epistemology, I defend in Section 3 an inferentialist view of the embeddedness of psychological states in a web of normative statuses, and show how this can lead to a vision of knowledge that lacks the problems identified in the first part of the paper.