ASSESSING THE ACCURACY OF DECISIONS

Much research demonstrates that people's choices do not conform to utility theory, a model of rational decision-making (Baron, 1988; Kahneman & Tversky, 1979; Slovic, Lichtenstein, & Fischhoff, 1988). Researchers have begun to question the normative status of utility theory in light of the many empirical violations of the theory. We argue that consistency with a formal model is not an appropriate standard for evaluating the quality of decisions. Rather, we propose that accuracy is a more useful standard. We define an accurate decision as one in which there is a one-to-one correspondence between the factors that affect a decision and those that affect experience. Based on our definition, we address the question of whether violations of normative models such as expected value theory and expected utility theory reflect inaccurate decisions. We argue that some violations of normative models do lead to inaccurate decisions. However, many violations may arise because the normative models prohibit factors from affecting decisions that do in fact affect the experience of the outcomes of decisions.