What does it Mean to be a Rational Decision Maker?

Abstract

Research on the psychology of decision making has historically relied on the principles of rational choice theory to provide a normative standard. For the most part, empirical research has documented deviations from this normative standard, with debate often centered on just how costly to individuals these deviations are. This paper challenges several normative features of the rational choice model. It suggests that “maximizing” (of utility, expected value, satisfaction) is often not the appropriate normative goal. It suggests that the value of decision outcomes cannot be assessed independent of the decision contexts that give rise to them (i.e., that the value of outcomes is not “path independent.”). And it suggests that the relation between the magnitude of an outcome (or a psychological characteristic) and its value is often non-monotonic. I argue that the honorific “rational” should be based on the substantive and not the formal properties of decisions — that an adequate theory of rational decision making should consider the way in which decisions enable people to live good, meaningful, and satisfying lives. And understood in this way, the hallmark of rationality is wise judgment.

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