ABSTRACT
A basic distinction is made in the field of decision-making between normative and descriptive models of choice behavior. A normative model is one that depicts how people ought to make decisions in order to maximize their personal outcomes and a descriptive model is one that depicts how people actually make decisions. The maximization model of microeconomic theory, a set of principles governing appropriate choice given the decision maker's assessment of costs and benefits (Mishan, 1976; Morgan & Duncan, 1982), has been advanced as both a normative and a descriptive model (Becker, 1976; see also Hirshleifer, 1985). But it has fared better as a normative model than as a descriptive one. A large accumulation of empirical evidence indicates that certain aspects of the microeconomic model do not describe people's ordinary decision processes (Arkes & Blumer, 1985; Hoskin, 1983; Tversky and Kahneman, 1986). The fact that the model often fails descriptively raises the question, If people do not commonly use cost-benefit reasoning, why should we believe that it is normative? Why should it guide our choices?
