ABSTRACT
An early review of evidence from psychological experimentation is that of Ward Edwards, who pointed to certain biases in the way people use probability scales. Edwards made a distinction between objective probability and subjective probability, suggesting that the latter provided the better predictions for actual behavior in risk-taking situations. Von Neumann and Oskar Morgenstern assume a decision framework in which all options are thoroughly considered, each option being independent of the others, with a numerical value derived for the utility of each possible outcome. A particularly important part of the context of decision making is provided by its social setting, including other persons present. One of the ways that social context is often part of decision making is in respect to the influence of the values, judgments, and behaviors of other decision makers. Moving from game theory to social exchange theory more generally, interpersonal comparisons become central theoretical concerns.
