Why Classical Decision Theory is an Inappropriate Standard for Evaluating and Aiding Most Human Decision Making

In its normative role, classical decision theory is an abstract system of propositions that is designed to describe the choices of an ideal hypothetical decision maker—omniscient, computationally omnipotent Economic Man—given the theory's very specific assumptions about the nature of the decision task. The assumption that classical theory is prescriptively appropriate has motivated nearly 40 years of empirical behavioral research—every study that has evaluated the quality of human decision making using the prescriptions of classical theory as the standard of comparison has been a reaffirmation of this assumption. Even the most casual reader of the decision literature is aware of the research on decision heuristics and biases. This work, started in large part by Ward Edwards, Daniel Kahneman, and Amos Tversky, and subsequently carried on both by them and by many other researchers, focuses upon judgment rather than decision making. However, insofar as it has examined decision making per se, it suggests or documents discrepancies between decision behavior and classical theory.