Standard decision theory and prospect theory: Philosophical considerations regarding theoretical change

Gustavo Marqués () and Diego Weisman ()
Additional contact information
Gustavo Marqués: Centro de Investigaciones en Epistemología de las Ciencias Económicas (CIECE), Facultad de Ciencias Económicas, Universidad de Buenos Aires; Facultad de Ciencias Económicas, Universidad Nacional de Lomas de Zamora. Dirección: Quintana 4671, (CP 1429) Ciudad de Buenos Aires, Argentina.
Diego Weisman: Centro de Investigaciones en Epistemología de las Ciencias Económicas (CIECE), Facultad de Ciencias Económicas, Universidad de Buenos Aires; Consejo Nacional de Investigaciones Científicas y Técnicas (CONICET). Dirección: S. Ortiz 2189, 3p (CP 1425) Ciudad Autónoma de Buenos Aires, Argentina.

Economía, 2011, vol. 36, issue 31, 55-83

Abstract: The paper shows the main problems faced by Expected Utility Theory, focusing on the sort of conceptual change introduced by Prospect Theory and suggesting that it could be characterized as a case of incommensurability in the Kuhnean sense. The impact that the coexistence of two rival visions about decisions under risk could have on economics is also evaluated. It is suggested that conventional decision theory could be the base of standard economics (interpreted as normative economics), while prospective theory can contribute to the development of a more descriptive oriented economics. Some of the philosophical consequences resulting from the theoretical change generated by Prospect Theory are also considered. Particularly, it is examined the proposal of biologic and psychological mechanisms for explaining decision making processes and the search of a broader (substantive) conception of rationality, the issue of methodological individualism and the non-interventionist approach associated with it.

Keywords: Decision theory; theoretical change; prospect theory. (search for similar items in EconPapers)
JEL-codes: A12 B00 B40 (search for similar items in EconPapers)
Date: 2011
References: Add references at CitEc
Citations:

Downloads: (external link)
ftp://iies.faces.ula.ve/Pdf/Revista31/Rev31Marques.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ula:econom:v:36:y:2011:i:31:p:55-83

Access Statistics for this article

Economía is currently edited by Dyanna María Ruíz Uzcátegui and Yibeli Emilia Briceño Carrero

More articles in Economía from Instituto de Investigaciones Económicas y Sociales (IIES). Facultad de Ciencias Económicas y Sociales. Universidad de Los Andes. Mérida, Venezuela Facultad de Ciencias Económicas y Sociales. Instituto de Investigaciones Económicas y Sociales. Campus Universitario Liria, Edificio G, Tercer Nivel. Mérida 5101, Estado Mérida, Venezuela. Contact information at EDIRC.
Bibliographic data for series maintained by Alexis Vásquez ().