Decision Theory and Decision Behaviour

The book explores the critical distinction between normative and descriptive decision theory, emphasizing their relevance in understanding decision-making processes. Normative decision theory focuses on how rational decisions should be made, employing formal mathematical language and rigorous definitions. In contrast, descriptive decision theory examines how people actually make decisions in real-life situations, often influenced by complex details and ambiguities. This comprehensive approach aims to clarify the theoretical foundations of decision-making while acknowledging the intricacies of human behavior.