Decision Theory and Allocating Decision Making in the Firm

Abstract

Sometimes it is possible to deal productively with the subject matter of choosing and making decisions without actually settling upon any particular theory of choice. This is the case in the law of business organisations, which does not settle upon a theory of choice because it does not consider itself the ultimate decision maker. Rather, the law develops rules to allocate decision-making authority among the various parties. Utilising only a few basic principles of decision theory, the law of business organisation creates a structure for allocating decision-making responsibility on many different levels. However, it leaves the ultimate decision makers free not only to make substantive decisions for themselves but also to select from among the various theories of choice for doing so.