Decisions under Uncertainty: Action-Hesitancy Model
21 Pages Posted: 17 Nov 2014 Last revised: 12 Sep 2015
Date Written: November 15, 2014
Neoclassical and behavioral economics rest on consequentialist maximization models of decision-making. This approach has been criticized for both the lack of realism and empirical inconsistencies but there are few viable substitutes. We propose a novel decision-making theory, the action-hesitancy model, aimed at articulating a non-consequentialist alternative to present models. According to this model, instead of maximizing any particular goal, agents strive to achieve cognitive clarity when making a decision. When hesitant, they seek new information in order to transform the appraisal of their situation in such a way as to make the course of action obvious. We argue that the action-hesitancy model is a realistic representation of decision-making capable of addressing a broad class of behavioral phenomena.
Keywords: choice; decision making; expected utility; prospect theory; rationality
JEL Classification: B41, B530, D03, D81
Suggested Citation: Suggested Citation