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Judgment and Decision Making by Baruch Fischhoff

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PART V

Deciding

Utility theory provides a normative standard for evaluating individuals’ choices: do they choose the options with the greatest expected utility? However, applying that standard requires knowing how a decision should be structured. That is, which options, outcomes, values, and uncertainties should it consider? Utility theory is mute on these questions, whose answers require substantive knowledge about people and their circumstances. Utility theory also says nothing about the possibility that its formulae are less relevant because people have developed efficient heuristic rules, learned what they like through trial and error, or willfully chosen to make non-rational choices (e.g., based on passion or uncompromising values). My research ...

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