Human decision making under uncertainty and risk: computer-based experiments and a heuristic simulation program
Pages 737 - 752
Abstract
Every organism of higher order has to make decisions of varying importance regularly and frequently in order to survive and to survive efficiently. While the outcome of decision making has been studied extensively by a wide range of different disciplines, the decision making processes themselves have been neglected in comparison. Emphasis has been placed on the normative aspects of human behavior, i.e., how a rational person or a group of rational persons ought to behave, as distinct from descriptive theories which are to explain and predict actual human behavior. An overwhelming majority of techniques and methods of attack in operations research, management science, industrial mathematics, etc. could be given the label: Normative Decision Theory. The students of mathematical psychology, on the other hand, beginning probably with Lady Lovelace, Bernoulli and Laplace, have been concerned with the behavioral aspects of decision making, i.e., what is being done in certain situations, and why.
References
[1]
The interested reader's attention is drawn to the following, far from exhaustive, list of papers and books, and to the extensive bibliographies included in them:
[2]
A. G. Hart, "Risk, Uncertainty and the Unprofitability of Compounding Probabilities," Studies in Mathematical Economics and Econometrics, O. Lange, F. McIntyre and T. O. Yntema, eds., University of Chicago Press, Chicago, 1942.
[3]
A. Wald, Statistical Decision Functions, Wiley, New York, 1950.
[4]
W. Edwards, "The Theory of Decision Making," Psych. Bull. vol. 51, pp. 380--417 (1954).
[5]
R. M. Thrall, C. H. Coombs and R. L. Davis, eds., Decision Processes, Wiley, New York, 1954.
[6]
D. Blackwell and M. A. Girschik, Theory of Games and Statistical Decision, Wiley, New York, 1954.
[7]
P. Wasserman and F. S. Silander, "Decision Making, An Annotated Bibliography," Grad. School of Business and Public Administration, Cornell Univ., 1958.
[8]
R. D. Luce and H. Raiffa, Games and Decisions, Introduction and Critical Survey, Wiley, New York, 1958.
[9]
L. Weiss, Statistical Decision Theory, McGraw-Hill, New York, 1961.
[10]
R. E. Machol and P. Gray, eds., Recent Developments in Information and Decision Processes, Macmillan, New York, 1962.
[11]
A. Newell and H. A. Simon, "Computers in Psychology," Handbook of Mathematical Psychology, Luce, Bush and Galanter, eds., Wiley, New York, 1963, vol. 1.
[12]
A. Newell and H. A. Simon, "Information Processing in Computer and Man," CIP Paper No. 67, Carnegie Institute of Technology, (Mar. 31, 1964).
[13]
A. Newell, J. C. Shaw and H. A. Simon, "Chess-Playing Programs and Problem of Complexity," IBM J. Res. and Dev., vol. 2, pp. 320--335 (1958).
[14]
A. Newell, J. C. Shaw and H. A. Simon, "Empirical Explorations of the Logic Theory Machine," Proc. WJCC, Los Angeles, Calif., 1957, pp. 218--230.
[15]
H. Gelernter, "Realization of a Geometry-Theorem Proving Machine," Proc. Internat. Conf. on Information Processing, Paris, 1959, pp. 273--282.
[16]
J. Robinson, "Theorem-Proving on the Computer," J ACM, vol. 10, pp. 163--174 (1963).
[17]
E. B. Hunt and C. I. Hovland, "Programming a Model of Human Concept Formulation," Proc. WJCC, Los Angeles, Calif., 1961, pp. 145--155.
[18]
E. A. Feigenbaum, "The Simulation of Verbal Learning Behavior," Computer on Thought, Feigenbaum and Feldman, eds., McGraw-Hill, New York, 1963.
[19]
A. Newell and H. A. Simon, "GPS, A Program that Simulates Human Thought," Lernende Automaten, H. Billing, ed., Oldenbourg, Munich, 1961, pp. 109--124.
[20]
J. Feldman, "Simulation of Behavior in the Binary Choice Experiment," Proc. WJCC, Los Angeles, Calif., 1961, pp. 133--166.
[21]
C. P. E. Clarkson, "A Model of, the Trust Investment Process," Computer and Thought, Feigenbaum and Feldman, eds., McGraw-Hill, New York, 1963.
[22]
See, e.g., C. L. Hull, Principles of Behavior, Appleton-Century-Crofts, New York, 1943, or R. R. Bush and W. K. Estes, Studies in Mathematics Learning Theory, Stanford University Press, Stanford, 1959.
[23]
See, e.g., H. A. Simon, "An Information Processing Theory of Intellectual Development," Thought in the Young Child, W. Kessen and C. Kuhlman, eds., (Monogr. Soc. Res. Child Dev., 27), pp. 137--161 (1962).
[24]
See e.g., H. A. Simon, "A Theory of Emotional Behavior," CIP Working Paper No. 55, Carnegie Institute of Technology (June 1, 1963).
[25]
A. S. Luchins, "Mechanization in Problem Solving: The Effect of Einstellung," Psych. Monographs, vol. 54, no. 6, whole no. 248, pp. 1--95 (1942).
[26]
W. R. Garner, Uncertainty and Structure as Psychological Concepts, Wiley, New York, 1962.
[27]
R. Hooke and T. A. Jeeves, " 'Direct Search' Solution of Numerical and Statistical Problems," J ACM, vol. 8, pp. 212--229 (1961).
[28]
M. M. Flood, "Stochastic Learning Theory Applied to Choice Experiments with Rats, Dogs and Men," Behavioral Science, vol. 7, pp. 289--314 (1962).
[29]
J. S. Bruner, J. J. Goodnow and G. A. Austin, A Study of Thinking, Wiley, New York, 1956.
[30]
G. A. Miller, E. Galanter and K. H. Pribram, Plans and Structure of Behavior, Holt, New York, 1960.
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Published: 30 November 1965
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