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Abstract

We discuss the goals and means of positive decision theory and the implications for how to do decision theory. We argue that the goal of positive economic theory generally is to provide predictions and understanding and that representation theorems and other results of decision theory should be seen as ways to achieve these goals. We also argue that the interpretation of a model is relevant to whether and how we use the model, that psychological considerations are not necessary for useful decision theory but can be helpful, and that nonchoice data, interpreted properly, can be valuable in predicting choice and therefore should not be ignored.

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File URL: http://www.annualreviews.org/doi/abs/10.1146/annurev.economics.102308.124328
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Bibliographic Info

Article provided by Annual Reviews in its journal Annual Review of Economics.

Volume (Year): 2 (2010)
Issue (Month): 1 (09)
Pages: 257-282

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Handle: RePEc:anr:reveco:v:2:y:2010:p:257-282

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Related research

Keywords: choice theory; axioms; representations;

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Find related papers by JEL classification:

• D01 - Microeconomics - - General - - - Microeconomic Behavior: Underlying Principles
• D80 - Microeconomics - - Information, Knowledge, and Uncertainty - - - General

References

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Cited by:

1. Spiegler, Ran, 2010. ""But Can't we Get the Same Thing with a Standard Model?" Rationalizing Bounded-Rationality Models," MPRA Paper 21428, University Library of Munich, Germany.
   
   • Spiegler, Ran, 2011. "‘But Can'T We Get The Same Thing With A Standard Model?’ Rationalizing Bounded-Rationality Models," Economics and Philosophy, Cambridge University Press, vol. 27(01), pages 23-43, March.
2. David Dillenberger & Andrew Postlewaite & Kareen Rozen, 2011. "Optimism and Pessimism with Expected Utility, Third Version," PIER Working Paper Archive 13-001, Penn Institute for Economic Research, Department of Economics, University of Pennsylvania, revised 26 Dec 2012.

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