Rational Choice

Descriptive interpretations of classical decision theory are supposed to provide (at least some) information about how people actually behave. These interpretations lie at the heart of modern economics and related social sciences.

Arguments for descriptive interpretations.

Many arguments for descriptive interpretations of classical decision theory are based on the claim that the theory provides sound normative guidance, together with the view that human beings are pretty good at making decisions. Moreover, it is sometimes added, natural selection should favor creatures that are more rational than their dimmer conspecifics, so that bit by bit the human species has become more rational.

Objections and replies.

One objection to empirical interpretations is that people simply cannot do what the classical theory requires. People rarely have definite probabilities and utilities, and even if they did, their working memory and computational capacities are too limited to perform the required calculations (or even to run through processes that would allow them to behave as if they performed such calculations). Moreover, while natural selection may favor better reasoning over worse, there is little reason to suppose it could attune individuals to the subtleties of calculating expected utilities.

Another objection to empirical interpretations is that people behave in ways that are inconsistent with the classical theory. Every history book chronicles follies that are dreadful by the agents' own lights. Furthermore, decades of intense empirical investigation suggest that people simply do not act in the way descriptive decision theory says they do. For example, people's preferences are highly sensitive to how options are described, even where the theory says they should not be.

One response to these criticisms is that people sometimes have something close to definite utilities and probabilities and the relevant calculations are not always too demanding, so people are sometimes capable of maximizing utility. Another response is to scale back the claims made for decision theory. Many economists, for example, hold that it predicts well enough at the aggregate level, even if it only approximates individual behavior.