Reasonable Decision Making in Complex Environments
Swedish National Defence College
A core element in psychological research on decision making has been comparisons between actual decision behavior and the decision behavior prescribed by normative models. For reasons yet to be discovered by historians, the normative models (usually some form of expected utility theory) acquired the status of standards of rationality, and deviations from what was prescribed by these models was seen as evidence that man was an irrational decision maker. While there is no dearth of examples of less-than-perfect decisions even in high places where experienced decision makers operate, the state of the world nevertheless does not seem to be quite as bad as one would expect from the hypothesis that people are incompetent and irrational decision makers. Nor is there any evidence that the bad decisions that we observe stem from any unwillingness to adhere to the favorite normative theories of psychologists, such as expected utility theory (see von Winterfeldt and Edwards, 1993, for arguments concerning expected utility theory, but see also Einhorn and Hogarth, 1981, for a discussion of the problems involved in applying normative theory in the "real world").
The focus on comparisons between normative theories and actual decision behavior has had two unfortunate consequences. First, it has narrowed psychologists' conception of what a decision is; it has limited the study of decision making to situations that confront the decision maker with a dilemma, and where the decision maker's task is to generate all possible courses of action, evaluate these, and then pick one according to