Decision Under Uncertainty: State of the Science

Itzhak Gilboa

Annual Review of Economics, 2025, vol. 17, issue 1, 1-30

Abstract: Expected utility maximization is the dominant theory for decision making under uncertainty. Over the past decades evidence has been accumulated, indicating that the theory is often violated and sometimes even questioned as a normative standard. Alternative theories have been proposed for choices with known and unknown probabilities. These theories, in turn, have also been challenged by more recent evidence. This review attempts to provide an overview of the field, highlighting some questions that economists should pose when modeling choice under uncertainty.

Keywords: behavioral economics; decision under uncertainty; decision theory; prospect theory; psychology and economics; decision under risk (search for similar items in EconPapers)
Date: 2025
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DOI: 10.1146/annurev-economics-090924-041522

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