Human decision making under uncertainty and risk: computer-based experiments and a heuristic simulation program

Abstract

Every organism of higher order has to make decisions of varying importance regularly and frequently in order to survive and to survive efficiently. While the outcome of decision making has been studied extensively by a wide range of different disciplines, the decision making processes themselves have been neglected in comparison. Emphasis has been placed on the normative aspects of human behavior, i.e., how a rational person or a group of rational persons ought to behave, as distinct from descriptive theories which are to explain and predict actual human behavior. An overwhelming majority of techniques and methods of attack in operations research, management science, industrial mathematics, etc. could be given the label: Normative Decision Theory. The students of mathematical psychology, on the other hand, beginning probably with Lady Lovelace, Bernoulli and Laplace, have been concerned with the behavioral aspects of decision making, i.e., what is being done in certain situations, and why.