March 2018
Intermediate to advanced
480 pages
13h 46m
English
The analysis methodology presented in this and the previous chapter for recommending decisions is called normative decision analysis because the methodology prescribes how people should make decisions rather than describes how people do make decisions. In 1954, L. Jimmie Savage developed axioms concerning an individual’s preferences and beliefs. If an individual accepts these axioms, Savage showed that the individual must prefer the decisions obtained using decision analysis. Tversky and Kahneman [1981] conducted a number of studies showing that individuals do not make decisions consistent with the methodology of decision analysis. That is, their studies indicate that decision analysis is not a descriptive ...
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