Much research in the last two decades has demonstrated that human responses deviate from the performance deemed normative according to various models of decision making and rational judgment (e.g., the basic axioms of utility theory). This gap between the normative and the descriptive can be interpreted as indicating systematic irrationalities in human cognition. However, four alternative interpretations preserve the assumption that human behavior and cognition is largely rational. These posit that the gap is due to (1) performance errors, (2) computational (...) limitations, (3) the wrong norm being applied by the experimenter, and (4) a different construal of the task by the subject. In the debates about the viability of these alternative explanations, attention has been focused too narrowly on the modal response. In a series of experiments involving most of the classic tasks in the heuristics and biases literature, we have examined the implications of individual differences in performance for each of the four explanations of the normative/descriptive gap. Performance errors are a minor factor in the gap; computational limitations underlie non-normative responding on several tasks, particularly those that involve some type of cognitive decontextualization. Unexpected patterns of covariance can suggest when the wrong norm is being applied to a task or when an alternative construal of the task should be considered appropriate. Key Words: biases; descriptive models; heuristics; individual differences; normative models; rationality; reasoning. (shrink)

Prospect Theory: For Risk and Ambiguity, provides a comprehensive and accessible textbook treatment of the way decisions are made both when we have the statistical probabilities associated with uncertain future events and when we lack them. The book presents models, primarily prospect theory, that are both tractable and psychologically realistic. A method of presentation is chosen that makes the empirical meaning of each theoretical model completely transparent. Prospect theory has many applications in a wide variety of disciplines. The material in (...) the book has been carefully organized to allow readers to select pathways through the book relevant to their own interests. With numerous exercises and worked examples, the book is ideally suited to the needs of students taking courses in decision theory in economics, mathematics, finance, psychology, management science, health, computer science, Bayesian statistics, and engineering. (shrink)

Our target article identified normativism as the view that rationality should be evaluated against unconditional normative standards. We believe this to be entrenched in the psychological study of reasoning and decision making and argued that it is damaging to this empirical area of study, calling instead for a descriptivist psychology of reasoning and decision making. The views of 29 commentators (from philosophy and cognitive science as well as psychology) were mixed, including some staunch defences of normativism, but also a number (...) that were broadly supportive of our position, although critical of various details. In particular, many defended a position that we call which sees a role for normative evaluation within boundaries alongside more descriptive research goals. In this response, we clarify our use of the term and add discussion of defining both as descriptive and non-normative concepts. We consider the debate with reference to dual-process theory, the psychology of reasoning, and empirical research strategy in these fields. We also discuss cognitive variation by age, intelligence, and culture, and the issue of relative versus absolute definitions of norms. In conclusion, we hope at least to have raised consciousness about the important boundaries between norm and description in the psychology of thinking. (shrink)