Discussion Of Behavioral Decision-Theory - Processes Of Judgment And Choice

Q: What are you doing? A: I am working hard. Q: What should you be doing? A: Doing the best I can. Q: Why aren't you doing that? A: But, I am! I am working hard doing the best I can. Our purpose here is to comment on some of the implications of the Einhorn and Hogarth (EH) synthesis for accounting research. We limit our comments to three issues raised in their synthesis. The first is the general issue of the "reasonableness" of normative models of decision making. Is it reasonable to ask the question "what should you be doing?" The second is the issue of the "reasonableness" of expected utility theory as a descriptive model of choice. Is it reasonable to use this model to characterize "working hard?" The third is the issue of how individuals tend to frame and make decisions. Did the way we asked the question affect the answer? We conclude with some speculations about possible implications for accounting research.

[1]  T. Wallsten,et al.  Individual Decision Behavior , 1972 .

[2]  D. P. Newman,et al.  Prospect theory: Implications for information evaluation , 1980 .

[3]  R. Hoskin.  Opportunity costs and behavior , 1981 .

[4]  Evan L. Porteus,et al.  Temporal Resolution of Uncertainty and Dynamic Choice Theory , 1978 .

[5]  Frederick Mosteller,et al.  An Experimental Measurement of Utility , 1951, Journal of Political Economy.

[6]  Joshua Ronen,et al.  Opportunity Costs-An Experimental Approach , 1974 .

[7]  J. Neumann,et al.  Theory of games and economic behavior , 1945, 100 Years of Math Milestones.

[8]  Robert H. Ashton,et al.  Cognitive Changes Induced by Accounting Changes: Experimental Evidence on the Functional Fixation Hypothesis , 1976 .

[9]  B. Neumann,et al.  Opportunity Costs: Further Evidence Through an Experimental Replication , 1978 .

[10]  Gerald A. Feltham,et al.  Cost Determination: A Conceptual Approach , 1976 .

[11]  David M. Kreps.  A REPRESENTATION THEOREM FOR "PREFERENCE FOR FLEXIBILITY" , 1979 .

[12]  B. Neumann,et al.  The Effects Of Opportunity Costs On Project Investment Decisions - A Replication And Extension , 1980 .

[13]  J. March.  Bounded rationality, ambiguity, and the engineering of choice , 1978 .

[14]  J. Mossin.  A Note on Uncertainty and Preferences in a Temporal Context , 1969 .

[15]  Ronald W. Hilton.  Integrating Normative and Descriptive Theories of Information Processing , 1980 .

[16]  Robert Schlaifer,et al.  Analysis of decisions under uncertainty , 1969 .

[17]  R. Thaler.  Toward a positive theory of consumer choice , 1980 .

[18]  A. H. Ashton,et al.  The descriptive validity of normative decision theory in auditing contexts , 1982 .

[19]  B. Fischhoff,et al.  Behavioral Decision Theory , 1977 .