The Wiley Blackwell Handbook of Judgment and Decision Making, First Edition. Edited by Gideon Keren and George Wu. 2015 John Wiley & Sons, Ltd. Published 2015 by John Wiley & Sons, Ltd.
A Birds-Eye View ofthe History of Judgment and
Decision MakingGideon Keren
Any historical account has a subjective element in it and is thus vulnerable to the benefit of hindsight (Fischhoff, 1975; Roese & Vohs, 2012). This historical review of 60 years of judgment and decision making (JDM) research is of course no exception. Our attempt to sketch the major developments of the field since its inception is further colored by the interests and knowledge of the two authors and thus surely reflects any number of egocentric biases (Dunning & Hayes, 1996; Ross, Greene, & House, 1977). Notwithstanding, we feel that there is a high level of agreement among JDM researchers as to the main developments that have shaped the field. This chapter is an attempt to document this consensus and trace the impact of these developments on the field.
The present handbook is the successor to the Blackwell Handbook of Judgment and Decision Making that appeared in 2004. That handbook, edited by Derek Koehler and Nigel Harvey, was the first handbook of judgment and decision making. Our overview of the field is prompted by the following plausible counterfactual: What if one or more JDM handbooks had appeared prior to 2004?1 Handbooks might (andshould) alter the course of a field by making useful content accessible, providing organizing frameworks, and posing important questions (Farr, 1991). Although we recognize these important roles, our chapter is motivated by one other function of a handbook: a handbooks editors serve as curators of that fields ideas and thus identify which research streams are important and energetic (and presumably most worth pursuing) and which ones are not. This chapter thus provides an overview of the field by considering what we would include in two hypothetical JDM handbooks, one published in 1974 and one published in 1988. We attempt to identify which topics were viewed as the major questions and main developments at the time of those
George WuUniversity of Chicago, Booth School of Business, USA
Department of Psychology, Tilburg University, the Netherlands
2 Gideon Keren and George Wu
handbooks. In so doing, we reveal how the field has evolved, identifying research areas that have more or less always been central to the field as well as those that have declined in importance. For the latter topics, we speculate about reasons for their decreased prominence.
Our chapters organization complements more traditional historical accounts of the field. Many reviews of this sort have appeared over the years in Annual Review of Psychology (e.g., Becker & McClintock, 1967; Edwards, 1961; Einhorn & Hogarth, 1981; Gigerenzer & Gaissmaier, 2011; Hastie, 2001; Lerner, Li, Valdesolo, & Kassam, 2015; Lopes, 1994; Mellers Schwartz, & Cooke, 1998; Oppenheimer & Kelso, 2015; Payne, Bettman, & Johnson, 1992; Pitz & Sachs, 1984; Rapoport & Wallsten, 1972; Shafir & LeBoeuf, 2002; Slovic, Fischhoff, & Lichtenstein, 1977; E. U. Weber & Johnson, 2009). In addition, excellent reviews appear as chapters in various nonJDM handbooks (Abelson & Levi, 1985; Ajzen, 1996; Dawes, 1998; Fischhoff, 1988; Gilovich & Griffin, 2010; Markman & Medin, 2002; Payne, Bettman, & Luce, 1998; Russo & Carlson, 2002; Slovic, Lichtenstein, & Fischhoff, 1988; Stevenson, Busemeyer, & Naylor, 1990); in W. M. Goldstein and Hogarths (1997) excellent historical introduction to their collection of research papers; and in textbooks, such as Bazerman and Moore (2012), Hastie and Dawes (2010), Hogarth (1987), Plous (1993), von Winterfeldt and Edwards (1986, pp. 560574), and Yates (1990).
We have divided 60 years of JDM research into four Handbook periods: 19541972, 19721986, 19862002, and 20022014. The first period (19541972) marks the initiation of several systematic research lines of JDM, many of which are still central to this day. Most notably, Edwards introduced microeconomic theory to psychologists and thus set up a dichotomy between the normative and descriptive perspectives on decision making. This dichotomy remains at the heart of much of JDM research. The second period (19721986) is characterized by several new developments, the most significant ones being the launching of the heuristics and biases research program (Kahneman, Slovic, & Tversky 1982) and the introduction of prospect theory (Kahneman & Tversky, 1979). In the third period (19862002), we see the infusion of influences such as emotion, motivation, and culture from other areas of psychology into JDM research, as well as the rapid spread of JDM ideas into areas such as eco-nomics, marketing, and social psychology. This period was covered by Koehler and Harveys (2004) handbook. In the last period (20022014), JDM has continued to develop as a multidisciplinary field in ways that are at least partially reflected by the increased application of JDM research to domains such as business, medicine, law, and public policy.
The present introductory chapter is organized as follows. We first discuss some important early milestones in the field. This discussion attempts to identify the under-lying scholarly threads that broadly define the field and thus situates the selection of topics for our four periods. In the next two sections, we outline the contents of two editions of the hypothetical Handbook of Judgment and Decision Making one published roughly in 1974 (to cover 19541972) and one published roughly in 1988 (to cover 19721986).2 As noted, the period from 19862002 is covered in Koehler and Harveys 2004 handbook and the last period is roughly covered in the present two vol-umes. We also discuss these two periods and comment on how the contents of these two handbooks reflect the field in 2004 and 2015, respectively. In the final section, we
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conclude with some broader thoughts about how the field has changed over the last 60 years. Speculations about what future directions the field might take are briefly presented in the final chapter.
Some Early Historical Milestones
Several points in time could be considered as marking the inception of judgment and decision making. One possible starting point may be Pascals wager: the French phi-losopher Blaise Pascals formulation of the decision problem in which humans bet on whether to believe in Gods existence (Pascal, 1670). This proposal can be thought of as the first attempt to perform an expected utility (hereafter, throughout the hand-book, EU) analysis on an existential problem and to employ probabilistic reasoning in an uncertain context. Two other natural candidates are Bernoullis (1738/1954) famous paper Exposition of a New Theory of Measurement of Risk, which intro-duced the notion of diminishing marginal utility, and Benthams (1879) book An Introduction to the Principles of Morals and Legislation, which proposed some dimen-sions of pleasure and pain, two major sources of utility (see Stigler, 1950). Because neither of these works had much explicit psychological discussion (but see Kahneman, Wakker, & Sarin, 1997 which discusses some of Benthams psychological insights), a more natural starting point is the publication of Ward Edwardss (1954) seminal article The Theory of Decision Making, in Psychological Bulletin, which can be viewed as an introduction to microeconomic theory written for psychologists. The topics of that influential paper included riskless choice (i.e., consumer theory), risky choice, subjective probability, and the theory of games, with the discussion of these topics interspersed with a series of psychological comments. The articles most essential exhortation is encapsulated in the papers final sentence: all these topics represent a new and rich field for psychologists, in which a theoretical structure has already been elaborately worked out and in which many experiments need to be per-formed (p. 411). Edwards followed up this article in 1961 with the publication of Behavioral Decision Theory in the Annual Review of Psychology. That paper should be seen as a successor to the 1954 article as well as evidence for the earlier papers enormous influence: This review covers the same subject matter for the period 1954 through April, 1960 (p. 473). The tremendous volume of empirical and theoretical research on decision making in those six years speaks to the remarkable growth of the emerging field of judgment and decision making.
Two other important publications also marked the introduction of JDM: Savages (1954) The Foundations of Statistics and Luce and Raiffas (1957) Games and Decisions. These two books cover the three major theories that dominated the field at its incep-tion: utility theory, probability theory, and game theory. A major query regarding each of the three theories concerned the extent to which they had a normative (what should people do) or a descriptive (what do people actually do) orientation. All three theories were originally conceived as normative in that they contained recommenda-tions for the best possible decisions, a view that reflected a tacit endorsement that human decision making is undertaken by homo economicus, an individual who strictly follows the rational rules dictated by logic and mathematics (Mill, 1836).3 Deviations
4 Gideon Keren and George Wu
were thought to be incidental (i.e., errors of performance) rather than systematic (e.g., errors of comprehension).
Edwards (1954) made clear that actual behavior might depart from the normative standard and inspired a generation of scholars to ques