Journal of Marketing Behavior > Vol 1 > Issue 2

What does it mean to be a Rational Decision Maker?

Barry Schwartz, Swarthmore College, USA, bschwar1@swarthmore.edu
 
Suggested Citation
Barry Schwartz (2015), "What does it mean to be a Rational Decision Maker?", Journal of Marketing Behavior: Vol. 1: No. 2, pp 113-145. http://dx.doi.org/10.1561/107.00000007

Publication Date: 21 Oct 2015
© 2015 B. Schwartz
 
Subjects
Behavioral Decision Making,  Choice Modeling,  Individual Decision Making,  Economic theory
 
Keywords
Rational choice theoryMaximizing and robust satisficing"Leaky" rationalityInverted U-shaped functions
 

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In this article:
1. Choice Overload and Maximizing 
2. Maximizing, Satisficing and “Radical Uncertainty” 
3. “Leaky” Rationality 
4. Non-Monotonicity of “Rationality” 
5. Conclusion: The Aristotelian Mean, Inverted-U’s, Satisficing, Leaks, and Rationality 
References 

Abstract

Research on the psychology of decision making has historically relied on the principles of rational choice theory to provide a normative standard. For the most part, empirical research has documented deviations from this normative standard, with debate often centered on just how costly to individuals these deviations are. This paper challenges several normative features of the rational choice model. It suggests that “maximizing” (of utility, expected value, satisfaction) is often not the appropriate normative goal. It suggests that the value of decision outcomes cannot be assessed independent of the decision contexts that give rise to them (i.e., that the value of outcomes is not “path independent.”). And it suggests that the relation between the magnitude of an outcome (or a psychological characteristic) and its value is often non-monotonic. I argue that the honorific “rational” should be based on the substantive and not the formal properties of decisions — that an adequate theory of rational decision making should consider the way in which decisions enable people to live good, meaningful, and satisfying lives. And understood in this way, the hallmark of rationality is wise judgment.

DOI:10.1561/107.00000007