ABSTRACT
Understanding how people make choices is of crucial interest to researchers across many academic disciplines, including economics, psychology, and neuroscience (Camerer et al., 2011; Glimcher and Fehr, 2013; Oppenheimer and Kelso, 2015; Weber and Johnson, 2009). Choice behavior is also central to the formulation and implementation of government policy (Halpern, 2016; Thaler and Sunstein, 2009). Thus, unsurprisingly, scientists have developed numerous mathematical and computational theories that can be used to describe and predict choice behavior. These theories take as inputs the set of choice options available to the decision maker and produce as outputs deterministic or probabilistic predictions of choice. Different theories make different assumptions about how the outcomes offered by choice options are evaluated, transformed, and aggregated to determine choice. This chapter will summarize these assumptions and review prominent theories in three key domains of decision-making: multiattribute choice (e.g., Keeney and Raiffa, 1993; Russo and Dosher, 1983), intertemporal choice (e.g., Loewenstein and Prelec, 1992; Mazur, 1987; Samuelson, 1937), and risky choice (e.g., Kahneman and Tversky, 1979; Von Neumann and Morgenstern, 1944). Researchers have also developed theories for other domains, such as social and strategic choice (e.g., Camerer et al., 2011; Fehr and Schmidt, 1999); however, the three domains considered in this chapter have received by far the most attention and are the focus of the best known and most influential theoretical work on choice behavior.
