Decision Analysis at the Crossroads

Empirically observed violations of traditional expected utility theory have prompted several new theories, putting the future of decision analysis at the crossroads. This essay describes the current status of the literature through selected examples of decision making scenarios. It concludes that if all relevant consequences of all alternatives are included in the analysis, then expected utility theory would prove to be valid. Practitioners who use techniques or software based on expected utility theory need only to make sure that they have considered all relevant consequences, and need not worry about the new non-expected utility theories.