Skip to main content Accessibility help
×
Hostname: page-component-586b7cd67f-2brh9 Total loading time: 0 Render date: 2024-11-28T22:15:41.193Z Has data issue: false hasContentIssue false

1 - Judgment and Decision Making: Extrapolations and Applications

Published online by Cambridge University Press:  11 January 2010

Rajeev Gowda
Affiliation:
Indian Institute of Management, Bangalore
Jeffrey C. Fox
Affiliation:
Catawba College, North Carolina
Get access

Summary

People who make or implement public policy must often estimate prob-abilities, predict outcomes, and make decisions that affect the welfare, values, and lives of many others. Until recently, many of the disciplines that study policy employed a model of individuals and organizations as rational agents whose predictions conform to the prescriptions of probability theory and whose actions maximize their expected gains in conformity with classical decision theory.

Such theories lead a double life. They are sometimes viewed as nor-mative models that tell us what we should do in order to be rational (even if we rarely manage to pull it off). Construed this way, they offer advice: We should have logically consistent beliefs, coherent probability assign-ments, and consistent preferences, and we should maximize expected utilities. But these same theories have also been viewed as descriptive models; construed this way, they are meant to provide an approximate characterization of the behavior of real people. It is this interpretation that has played a central role in economics, management science, and parts of political science, sociology, and the law.

Since the early 1970s, this descriptive picture of judgment and de-cision making has come under increasing attack from scientists work-ing in behavioral decision theory, the field concerned with the ways in which people actually judge, predict, and decide.

Type
Chapter
Information
Publisher: Cambridge University Press
Print publication year: 2001

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

Save book to Kindle

To save this book to your Kindle, first ensure [email protected] is added to your Approved Personal Document E-mail List under your Personal Document Settings on the Manage Your Content and Devices page of your Amazon account. Then enter the ‘name’ part of your Kindle email address below. Find out more about saving to your Kindle.

Note you can select to save to either the @free.kindle.com or @kindle.com variations. ‘@free.kindle.com’ emails are free but can only be saved to your device when it is connected to wi-fi. ‘@kindle.com’ emails can be delivered even when you are not connected to wi-fi, but note that service fees apply.

Find out more about the Kindle Personal Document Service.

Available formats
×

Save book to Dropbox

To save content items to your account, please confirm that you agree to abide by our usage policies. If this is the first time you use this feature, you will be asked to authorise Cambridge Core to connect with your account. Find out more about saving content to Dropbox.

Available formats
×

Save book to Google Drive

To save content items to your account, please confirm that you agree to abide by our usage policies. If this is the first time you use this feature, you will be asked to authorise Cambridge Core to connect with your account. Find out more about saving content to Google Drive.

Available formats
×