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Choice theories can be classified in a number of ways. Normative theories seek to clarify how decisions should be made; descriptive theories try to understand how they are made in the real world. Theories may also concentrate on decisions made by individuals, groups, or societies. Normative theories tend to emphasize rational decision making and provide the underpinnings for economic evaluations, decision analysis, and technology assessment. Variations, including shared decision making, often focus on who should be making decisions but retain the assumptions of rationality. In contrast, descriptive models often emphasize psychological factors, including heuristics and biases. At the policy-making level, however, the recognition of the difficulties in constructing social welfare functions has led to intermediate models with both normative and descriptive elements, including bounded rationality, incrementalism, and mixed scanning.

Normative Theories

Rational Decision Making

Rational choice theory assumes that individuals act to maximize their own utility. A rational individual must therefore

  • determine the range of possible actions that might be taken,
  • determine the possible outcomes that might result from each of these actions,
  • affix a probability to each possible outcome (these must sum to 1.0),
  • affix values to the costs and consequences of each possible outcome, and
  • do the math.

The rational choice will be the one that produces the “best” outcome, as measured in terms of costs and consequences.

Rational decision making is highly data-intensive. It requires a decision maker to collect extensive information about all potential choices, outcomes, costs, and consequences. He or she must be able to order his or her preferences for different outcomes, and these preferences must satisfy the requirements of being complete (i.e., all potential outcomes are assigned preferences) and transitive (i.e., if someone prefers A to B, and B to C, he or she must prefer A to C). In the real world, these assumptions are often unrealistic.

Economists have adopted the theory of revealed preferences to omit some of these steps. Rather than attempt to measure preferences directly, this approach assumes that if someone has chosen a particular outcome, he or she must, by definition, prefer it to the alternatives. Associated with Paul Samuelson, this approach has been highly influential in the study of consumer behavior. It is also tautological and does not leave much room for improving choices (e.g., through providing additional information).

Rational Choice in Medical Decision Making

Decision Analysis

Medical decision making relies heavily on rational choice theory. One common way of analyzing treatment choices, decision analysis, employs the same structure. Constructing a decision tree requires specifying the possible actions (“choice nodes”), specifying the possible outcomes of each action (“chance nodes”), attaching probabilities to each outcome (which must sum to 1.0), and then affixing costs and consequences to each outcome. The tree is then “folded back” by computing the expected value at each node by multiplying the probability by the costs and by the consequences.

For example, in their five-part primer, Medical Decision Analysis, Allan Detsky and colleagues work through the example of how to model the choice of management strategies for patients presenting with clinical features that suggest giant cell arteritis (GCA). In this simplified model, the only treatment considered is treating with steroids, which can involve side effects. The rational model they employ thus involves a choice between three possible actions at the choice node—treating, not treating, and testing and treating only if the test result is positive. The possible outcomes can be simplified to four possibilities, depending on whether or not there was an adverse outcome as a result of the disease (in that case, blindness), and whether or not the person had side effects as a result of the treatment. Note that some of these outcomes cannot occur on some branches—for example, someone who did not receive treatment could not experience any outcomes involving side effects. The next step for the decision maker is to determine how likely each of these possible outcomes would be at each choice node (e.g., how likely would an untreated individual with those symptoms be to experience blindness if the person was not treated). Next, the decision maker would affix costs and utilities to each possible outcome. For example, these papers assigned a value of 1.0 to the state with no disease and no side effects, and a value of .5 to the state of having the disease without treatment (or side effects) but ending up with blindness. Sensitivity analysis can be used to modify these values (e.g., change the probability of adverse outcomes or the value attached to particular outcomes) and see how much they affect the resulting choices.

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