Decision Theory
The study of how individuals make choices among alternatives and the principles that guide these choices.
12 topics found for
“rational choice”
Expected Utility Theory
A theory in economics that models how rational individuals make decisions under risk by maximizing the expected utility of their choices.
Homo Economicus
A theoretical concept in economics that portrays humans as rational and self-interested agents who aim to maximize their utility.
Take the Best Heuristic
A decision-making rule where individuals choose the option with the highest perceived value based on the first good reason that comes to mind, ignoring other information.
Critical Thinking
The objective analysis and evaluation of an issue in order to form a judgment.
Bounded Rationality
A concept that humans make decisions within the limits of their knowledge, cognitive capacity, and available time, leading to satisficing rather than optimal solutions.
Irrational Escalation
The phenomenon where people continue a failing course of action due to the amount of resources already invested.
Numerosity Bias
The tendency to perceive a greater quantity as a better value, regardless of the actual utility.
Hot Hand Fallacy
The mistaken belief that a person who has experienced success in a random event has a higher probability of further success in additional attempts.