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Rational Choice in an Uncertain World

Rational Choice in an Uncertain World
The Psychology of Judgment and Decision Making

Second Edition

January 2010 | 392 pages | SAGE Publications, Inc
In the Second Edition of Rational Choice in an Uncertain World the authors compare the basic principles of rationality with actual behaviour in making decisions. They describe theories and research findings from the field of judgment and decision making in a non-technical manner, using anecdotes as a teaching device. Intended as an introductory textbook for advanced undergraduate and graduate students, the material not only is of scholarly interest but is practical as well.

The Second Edition includes:

- more coverage on the role of emotions, happiness, and general well-being in decisions

- a summary of the new research on the neuroscience of decision processes

- more discussion of the adaptive value of (non-rational heuristics)

- expansion of the graphics for decision trees, probability trees, and Venn diagrams.

Chapter 1 - Thinking and Deciding
1.1 Decision Making Is a Skill
1.2 Thinking: automatic and Controlled
1.3 The Computational Model of the Mind
1.4 Through the Darkest Psychoanalytical Theory and Behaviorism to Cognition
1.5 Quality of Choice: Rationality
1.6 The Invention of Modern Decision Theory
Chapter 2 - What Is Decision Making?
2.1 Definition of a Decision
2.2 Picturing Decisions
2.3 Decision Quality, Revisited
2.4 Incomplete Thinking: A Legal Example
2.5 Over-Inclusive Thinking: Sunk Costs
2.6 The Rationality of Considering Only the Future
2.7 The Rest of This Book
Chapter 3 - A General Framework for Judgment
3.1 A Conceptual Framework for Judgment and Prediction
3.2 Research With the Lens Model Framework
3.3 Capturing Judgment in Statistical Models
3.4 How Do Statistical Models Beat Human Judgment?
3.5 Practical Implications of the Surprising Success of the Linear Model
3.6 Objections and Rebuttals
3.7 The Role of Judgment in Choices and Decisions
Chapter 4 - The Fundamental Judgment Strategy: Anchoring and Adjustment
4.1 Salient Values
4.2 Anchoring and (Insufficient) Adjustment
4.3 Anchoring on Ourselves
4.4 Anchoring the Past in the Present
Chapter 5 - Judging Heuristically
5.1 Going Beyond the Information Given
5.2 Estimating Frequencies and probabilities
5.3 Availability of Memories
5.4 Biased Samples in Memory
5.5 Biased Sampling From Memory
5.6 Availability to the Imagination
5.7 From Availability to Probablility and Causality
5.8 Judgment by Similarity: Same Old Things
5.9 Representative Thinking
5.10 The Ratio Rule
Chapter 6 - Explanation-Based Judgments
6.1 Everyone Likes a Good Story
6.2 The Conjunction Probabliity Error (Again)
6.3 Judging From Explanations
6.4 Legal Scenarios: The Best Story Wins in the Courtroom
6.5 Scenarios About Ourselves
6.6 Scenarios About the Unthinkable
6.7 Hindsight: Reconstructing the Past
6.8 Sometimes It's Better to Forget
Chapter 7 - Chance and Cause
7.1 Misconceptions About Chance
7.2 Illusions of Control
7.3 Seeing Causal Structure Where It Isn't
7.4 Regression Toward the Mean
7.5 Reflections on Our Inability to Accept Randomness
Chapter 8 - Thinking Rationally About Uncertainty
8.1 What to Do About the Biases
8.2 Getting Started Thinking in Terms of Probabilities
8.3 Comprehending the Situation Being Judged
8.4 Testing for Rationality
8.5 How to Think About Inverse Probabilities
8.6 Avoiding Subadditivity and Conjunction Errors
8.7 The Other Side of the Coin: The Probability of a Disjunction of Events
8.8 Changing Our Minds: Bayes's Theorem
8.9 Statistical Decision Theory
8.10 Concluding Comment on Rationality
Chapter 9 - Evaluating Consequences: Fundamental Preferences
9.1 What Good is Happiness?
9.2 The Role of Emotions in Evaluations
9.3 The Value of Money
9.4 Decision Utility -- Predicting What We will Value
9.5 Constructing Values
Chapter 10 - From Preferences to Choices
10.1 Deliberate Choices Among Complex Alternatives
10.2 Ordering Alternatives
10.3 Grouping Alternatives
10.4 Choosing Alternatives
10.5 How to Make Good Choices
Chapter 11 - A Rational Decision Theory
11.1 Formally Defining Rationality
11.2 Making Theories Understandable -- The Axiomatic Method
11.3 Defining Rationality: Expected Utility Theory
11.4 Traditional Objections to the Axioms
11.5 The Shoulds and Dos of the System
11.6 Some Bum Raps for Decision Analysis
Chapter 12 - A Descriptive Decision Theory
12.1 Non-expected Utility Theories
12.2 Gain-Loss Framing Effects
12.3 Loss Aversion
12.4 Look to the Future
Chapter 13 - What's Next? New Directions in Research on Judgment and Decision Making
13.1 The Neuroscience of Decisions
13.2 Emotions in Decision Making
13.3 The Rise of Experimental Methods to Study Dynamic Decisions
13.4 Do We Really Know Where We're Headed?
Chapter 14 - In Praise of Uncertainty
14.1 Uncertainty as Negative
14.2 The Illusion of Hedonic Certainty
14.3 The Price of Denying Uncertainty
14.4 Two Cheers for Uncertainty
14.5 Living With Uncertainty

We are still looking to adapt, this book isn't quite what we would like to cover our course requirements.

Ms Cindy Rossi
Military Science Dept, Oregon State University
August 11, 2010

I'm teaching a cass on judgment processes and will recommend the book "Rational Choice in an Uncertain World" as introduction material. Particularly chapter two and three give a good and easy introduction to the history of research on decision making and judgment and the lense model framework the class will mainly focus on. I think it will be an perfect introduction that allows students to get a good oveview before we go into more details reading journal articles on specific aspects of judgment processes.

Dr Bettina Von Helversen
Center for Economic Psychology, University of Basel
July 19, 2010

VERY interesting reading, covering some stimulating topics that have been very valuable in classroom discussions

Mr Nicholas Snowden
Management , Hull College
May 5, 2010

We will recommend this for the decision making module at under and post graduate level. It is an alternative to Drummond and Bazerman. The focus on psychology is a nice bridge between those two. it is well written and accessable.

Mr Giles Peter McClelland
Business Administration , Edge Hill University
March 25, 2010

Excellent book - shame I missed the first edition. The focus on the wide use of these therories is very good

Dr Nick Lund
IDS, Manchester Metropolitan University
March 15, 2010

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ISBN: 9781412959032