Gilboa and Schmeidler's work demonstrates an important distinction between behavior as predicted by Expected Utility Theory and as predicted by Case Based Decision Theory: in the event of a posed similar, familiar decision, people will revert to their memories of past situations to determine their current course of action. The implications of their distinctions are interesting, since it suggests the presence of an inclination towards simplifying decisions. Whenever possible, we will attempt to reduce our behavioral choice options by comparing them to choices we have already made and this to me seems like a process designed to both save some cognitive energy and adopt what we have learned from the past.
[...] This discussion also touches on the theory of satisfying, which states that people will generally choose the decision that satisfies some minimum level of utility for them, without necessarily maximizing utility (i.e. we will make the “first-best” choice that comes our way, possibly because waiting for the best choice may take too long). This theory, coupled with case based decision theory, suggests that if we consistently satisfice, we may be inhibited from reaching maximum utility. This is what my previous argument is premised on, and essentially it seems likely [...]
[...] This example illustrates the advantages of being able to account for historical decisions when contemplating one's current decision options. However, one question that comes to mind is: what is the difference between being able to account for someone else's historical decisions versus being able to account for one's own historical decisions. In other words, Deep Blue exploited the use of someone else's predicted behavior, not the predicted behavior of itself. Kasparov, on other hand, was influenced (probably unknowingly) by his past decisions because the fact that the computer consistently beat him meant that he continued to make the errors he had made in the past. [...]
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