Intuitions about rationality and cognition

The fundamental distinction between normative and descriptive theories of decision making is accepted by most students of human behaviour. The normative theory, which has emerged from a logical analysis of games of chance, describes the rules according to which an idealized, superrational individual should make decisions. Descriptive theories, which emerge from psychological analyses of value, risk, and uncertainty, describe the ways in which real people make decisions. While the theoretical distinction between the two accounts is clear, the normative theory has been widely applied throughout the social sciences as part of a descriptive analysis. In effect, the axioms of the rational theory are so intuitively appealing that many have considered it likely that a theory derived from these axioms would provide an acceptable, if somewhat idealized, account of actual behaviour. von Neumann and Morgenstern, the founders of modern expected utility theory, hoped to show that ‘it is possible to describe and discuss mathematically human actions in which the main emphasis lies on the psychological side’. There are, they concluded, ‘many - and most important - aspects of psychology which we have never touched upon, but the fact remains that a primarily psychological group of phenomena has been axiomatized’ (von Neumann and Morgenstern, 1944: 76-7). The rational theory captures strong psychological intuitions and has led many researchers to hope for a symbiotic analysis, one that will meet the normative desiderata while at the same time describing how we actually go about making decisions.