Behavioral economics for decision support systems researchers

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    Abstract

    Theories of decision-making, both prescriptive and descriptive, have long been important to decision support systems (DSS). Currently, the field of behavioral economics (BE) provides the dominant descriptive approach for understanding human decision-making. An indication of the field's standing is that three Nobel Prizes have been awarded to behavioral economics. Contemporary BE has two major theory foundations – the dual process theory of decision-making cognition and a set of judgment heuristics and cognitive biases. These foundations have been combined to create important theories like prospect theory and action strategies like nudging. Previous research has found that DSS has been slow to adopt recent advances in BE, even to the extent that some projects continue to use older theories like the phase model of decision making. This paper aims to make DSS researchers aware of contemporary BE, its nature, and its differences with early BE. We believe that behavioral economics is a useful and productive foundation for DSS research and that the use of BE in DSS should be significantly expanded.

    Original languageEnglish
    Article number113063
    Number of pages12
    JournalDecision Support Systems
    Volume122
    DOIs
    Publication statusPublished - Jul 2019

    Keywords

    • Behavioral economics
    • Decision support systems
    • Decision-making
    • Dual process theory
    • Heuristics and biases

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