Rational Choice in an Uncertain World : The Psychology of Judgement and Decision Making (book)

The authors of this book,like so many other psychologists in the area of decision making under uncertainty(ambiguity)in the real world ,as opposed to risk,appear to think that "modern"behavioral decision theory started with Daniel Ellsberg and advanced on the shoulders of Tversky and Kahneman with Hogarth and Einhorn close behind.They do a good job covering the conventional wisdom of that view.Unfortunately,they ignore the seminal and path breaking contributions made to the field of decision making under uncertainty by John Maynard Keynes in his classic work,titled A Treatise on Probability in 1921.Keynes was the first to systematically develop an interval estimate(set) approach to the calculation of probabilities.Keynes was the first to specify an index to measure the ambiguity of the potential available evidence upon which a decision maker would attempt to make reliable probability estimates.Keynes called this problem the weight of the evidence problem.Forty years before Ellsberg(1961),Keynes had already specified an index to measure the completeness of the relevant available evidence,w.w was defined on the unit interval between 0 and 1,i.e.,0<=w<=1.Keynes's w index is practically the same as Ellsberg's rho index.Keynes successfully generalized the expected value rule(maximize pA=EMV)and the expected utility rule(maximize pU(A))where p is a probability,A is the outcome,and U is an appropriately differentiable utility function with his decision weight model that he called a conventional coefficient of weight and risk,c.The goal of the decision maker is to maximize cA,where c equals p/(1+q)[2w/(1+w}].Keynes's decision weight rule ,c, not only solves all of the Ellsberg paradox problems,but also the certainty ,reflection , and translation effect problems,as well as the preference reversal problems.

I read this book as part of a college course on cognition. It was defintely the most interesting of the 3 books we read in this class.

The book effectively teaches you how to go about making well-thought-out decisions. The text in itself is easy to read and comprehend. There are also many apt examples, both abstract and from everyday life. This combination ensures a successful reading of this book.

While I would have probably never read this book if not for the class I took, I'm glad I did and would recommend this people from all walks of life. Being able to make a good, well-thought-out, rational decision is the best skill one can have.

The authors emphasize that decision-making is a skill that can be learned and improved. As I work with career changers, I have become convinced that most of us have not learned this skill, and most of us could benefit from a careful reading of this book.

Hastie and Dawes present results of scientific psychological research, using language that is easy for the ordinary person to understand. Their examples come from everyday life and news stories: Chernobyl, the "hot hand" theory of basketball, mammography.

I would also recommend this book to any students of psychology, including those entering graduate school in social psychology, marketing or management. Hastie and Dawes demonstrate that academic studies needn't be dry, but in fact yield fascinating conclusions that are widely relevant. At the same time, they show the way researchers think and introduce the notion of probability in a way that makes readers want to learn more.

The authors emphasize that decision-making is a skill that can be learned and improved. As I work with career changers, I have become convinced that most of us have not learned this skill, and most of us could benefit from a careful reading of this book.

Hastie and Dawes present results of scientific psychological research, using language that is easy for the ordinary person to understand. Their examples come from everyday life and news stories: Chernobyl, the "hot hand" theory of basketball, mammography.

I would also recommend this book to any students of psychology, including those entering graduate school in social psychology, marketing or management. Hastie and Dawes demonstrate that academic studies needn't be dry, but in fact yield fascinating conclusions that are widely relevant. At the same time, they show the way researchers think and introduce the notion of probability in a way that makes readers want to learn more.

The addition of Reid Hastie as an author to Robyn Dawes' classic text on judgment and decision making was superb choice. This edition appears to be written very much in Hastie's voice, from the perspective of a cognitive psychologist. Moreover, we find additional attention paid to algebraic models, which was something that was missing from previous editions. Hastie and Dawes ranks as one of the essential readings for the judgment and decision-making field.