Book Reviews 227

Keeney, R. L. and Raiffa, H. Decisions with Multiple Objectives: Preferences and value tradeoff (2nd edition), New York: Cambridge University Press, 1993.

McNeil, J. J., Pauker, S. G. and Tversky, A. ‘On the framing of medical decisions, in Bell. D. E., Raiffa, H., and Tversky, A. (eds). Decision making: Des- cripriw, normurive, and prescriptive interactions (562-568), New York: Cambridge University Press, 1988.

Miyamoto, J. M. ‘Generic analysis of utility models’, in Edwards, W. (ed.), Utility Theories: Measurements and upplications, Boston, Kluwer, 1992.

Miyamoto, J. M. and Wakker, P. ‘Multiattribute utility theory without expected utility foundations’, Opera- tions Research, in press.

Slovic, P. and Lichtenstein, S. ‘Preference reversals: A broader perspective’, American Economic Review, 73 (1983). 596-605.

Slovic, P., Lichtenstein, S. and Fischhoff, B. ’Decision making’, in Atkinson, R. C. and Stevens, S. S. (eds). Stevens’ Handbook of‘ E.uperinicntul P.yjdiologjt (673-738), New York: Wiley, 1988.

Tversky, A. and Kahneman, D. ‘Rational choice and the framing of decisions’, Journal of Business, 59 (l986), 251-278.

Tversky, A. and Kahneman, D. ‘Advances in prospect theory: Cumulative representation of uncertainty’, Journal of‘ Risk and Uncertainty, 5 (1992), 297-323.

Tversky, A., Sattath, S. and Slovic, P. ‘Contingent weighting in judgment and choice’, P.sjdiologicu1 Review, 95 (1988), 371-384.

Wakker. P. P. ‘Additive representations on rdnk- ordered sets. Part 11. The topological approach’, Journal of Mathematical Economics. forthcoming, 1991.

Wu, G. and Gonzalez, R. ‘Curvature of the probability weighting function’, Management Science, in press.

Boundaries of Rationality

THINKING AND DECIDING (second edition), Baron. Jonathan, Cambridge: Cambridge University Press, 1994. 588 pp.. ISBN 0 521 43732 6 (pb). Review bjs Dun Zukay, TeI-Aviv University.

The first edition of this book, published in 1988, gained a positive review (Medin, 1990), which the second edition deserves as well. In the second edition, the author makes some revisions which bring the chapters on judgment and decision making up to date, both with the literature and with his own improved under- standing of the field. This is a good reason for a revision and the second edition is justified.

Baron presents an original and innovative point of view which makes the book unique among other textbooks on judgment and decision making (JDM). The traditional approach of researching and teaching JDM is to treat the domain as ‘stand-alone‘, without tying it to other domains of cognitive and social psychology. The approach taken by the author can be defined as a system approach, since JDM is discussed within a broad framework which includes the domains of thinking, problem solving, negotiation, fairness, justice and social dilemmas. I find this approach to be very enlightening, since people do not make judgments and decisions in a vacuum, but rather in a social context within which they solve real-life problems which often include notions of justice and fairness. An important merit of the book is that it presents a good picture of a traditional JDM approach while tying it nicely with the other domains mentioned.

Thinking and Deciding is an excellent. informative book. It is also quite evident that Baron is also trying to convey a message about how people should make decisions and is even trying to educate the reader. Although this is a legitimate thing to do, the educational message is somewhat disputable. This point was raised by Medin (1 990) in his review of the first edition. Baron’s argument for an universal rather than relativistic view of moral judgment and for a form of utilitarianism that defines best actions as those that have the highest expected utility across people was criticized by Medin and counterarguments, which will not be repeated here, were presented. I tend to agree with Medin’s critique and would like to add that even more non-normative approaches to rationality have been introduced in the last few years. These approaches differ from the norm- ative model of rationality and even from bounded- rationality approaches. O’Brien (1993) claims that an adequate theory of human logical reasoning needs to account for both logically correct and erroneous judg- ments. This argument is interesting in light of a demon- stration (English and Allison, 1993) that behavior which appears rational, optimal, or adaptive may truly be a random response to external constraints.

Other interesting views on rationality are provided by ecological approaches. One example is content-bound theory (Cheng and Holyoak, 1985), which argues that people reason typically not by using logical-inference schemas, but by using inductive learned rules - defined in terms of classes of goals, such as taking desirable actions or predicting future events.

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The only reservation that I have about Thinking and Deciding is that not all these approaches are presented such that the readers are able to choose for themselves the one that fits them best. I believe that this, more comprehensive approach, could be more informative than presenting, in the main, the author’s own approach.

The book covers most of the fundamental areas of JDM and includes a good discussion of: the normative theory of probability; descriptive theories of prob- ability judgment; hypothesis testing; and biases and beliefs. Other chapters present the normative theory of utility and choice, and decision analysis and utility measurement. The latter includes multi-attribute utility theory. A key focus is the comparison of descriptive theories of choice under certainty with the normative theories. Three major questions are discussed in Part One of the book: ( I ) The normative question: what is good thinking? (2) The descriptive question: how do we think?, (3) The prescriptive question: what can we do to improve our thinking and decision making? The later chapters extend the discussion to the moral aspects of decision making. The author claims that though decision makers should always try to maximize the utility of outcomes, moral aspects of the outcomes should also be considered.

In the last chapter of the book, the potential conflict between immediate and future goals is analysed and the significance of this conflict for the decision-making process is elaborated. The last two sentences of the book, however, put the potential contribution of the scientific knowledge presented in the book in propor- tion. It is claimed that ‘. . . actively open-minded con- sideration of the options before us can help us achieve our goals. Thinking, however, does not guarantee a good life. Luck, good and bad, is ever-present’ (p. 533).

Despite this broad coverage of topics, the book could be even more complete if some new approaches were also presented. One such approach is Naturalistic Decision Making (NDM), which provides an alter- native to ‘traditional’ judgment and decision-making research (see, for example, Klein et al., 1993). The NDM approach assumes that real-life decision making cannot be explained by descriptive theories that have

been derived from normative models. since decisions are made under dynamic and continually changing conditions with ill-defined goals and ill-structured tasks. It could be valuable to systematically compare the NDM approach with the JDM approach and to contrast the two.

Despite these comments, the book is undoubtedly exhaustive and rich. The material is presented clearly without using complex mathematical terms. This makes the material accessible to any intelligent person interested in the field. Baron also introduces his own view, the search-inference framework, for describing how decisions are taken. The search-inference frame- work suggests that inferences are made from possi- bilities, evidence and goals that are discovered through searching. These discoveries are key elements in the decision-making process, which Baron views as goal- directed mental activity. This is an interesting view which seems to me to be quite close to some of the naturalistic approaches.

To conclude, the second edition of Thinking and Deciding is an improved and updated version of an excellent book. The book is highly recommended for anyone who is interested in learning about the important fields of judgment, decision making and thinking-and about the relationships between them.

REFERENCES

Cheng, P. W. and Holyoak, K. J. ‘Pragmatic reason- ing schemas’, Cognitive Psychology, 17 (1985), 392-416.

English, J . and Allison, ‘Chance and rationality’, Psychological Review, 100 ( 3 ) , (1993), 535-545.

Klein, G. A., Orsanu, J., Colderwood, R. and Zsambok, C . E. (eds) Decision Making In Action: Modeh and Methods, Norwood, NJ: Ablex, 1993.

Medin, D. L. ‘Thinking and Deciding’, Journal of Behavioral Decision Making, 3 (2), (1990), 14Ck142.

O’Brien, D. P., ‘Mental logic and human irrationality’, In: Manktelow, K. I . and Over, D. E. (eds) Ration- ality, Psychological and Philosophical Perspectives (1 l@-135), London: Routledge, 1993.