Paradoxes and Violations of Normative Decision Theory
Published Online: 15 JUN 2010
Copyright © 2010 John Wiley & Sons, Inc. All rights reserved.
Wiley Encyclopedia of Operations Research and Management Science
How to Cite
Simon, J., Wang, Y. and Keller, L. R. 2010. Paradoxes and Violations of Normative Decision Theory. Wiley Encyclopedia of Operations Research and Management Science. .
- Published Online: 15 JUN 2010
In this article, first classic examples of descriptive violations of normative decision theory from Allais and Ellsberg are discussed, and then the behavioral phenomena of loss aversion, endowment effect, status quo bias, and framing effects are discussed.
- economic decision theory;
- normative theory;
- utility theory;
- certainty effect;
- reflection effect;
- decision analysis;
- prospect theory;
- endowment effect;
- status quo bias;
- loss aversion