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Choices, Values, and Frames, edited by Daniel Kahneman and Amos Tversky, New York: Cambridge University Press, 2000, 840 pp., $40.00.
Choices, Values, and Frames, edited by Daniel Kahneman and the late Amos Tversky, is a major update and extension of the ground-breaking work presented in their earlier volume, Judgment under Uncertainty. The present book is a worthy successor to its celebrated predecessor.
The editors gather together material for 42 chapters, which, cumulatively, presents a convincing descriptive alternative to the standard normative model of rational choice. Most of the chapters have been published elsewhere, but they are so scattered across time, journals, and disciplines that merely bringing them together in one place constitutes a valuable contribution. Much more important, though, is the way the various chapters reinforce one another. Critics might be tempted to dismiss any given finding as anomalous, or theoretically unmotivated, or lacking in either external or internal validity. However, for each chapter that may be vulnerable to any one of these criticisms, there are several others in the book that can help diffuse them. They triangulate in such a way that, taken together, the chapters in Choices, Values, and Frames force any reasonable critic to acknowledge that for a rather large and consequential range of phenomena the standard account of rational choice is simply not as descriptively adequate as the authors' alternative- i.e., prospect theory.
Part 1 of the book consists of two seminal papers by the editors. For historical purposes, the eponymous "Prospect Theory" (chapter 2) is a great study in theoretical synthesis from scattered empirical findings. However, for purposes of navigating the rest of the book "Advances in Prospect Theory" (chapter 3) is more important and probably sufficient. Given the large number of entries in each subsequent section of the book and the limited space for this review, I cannot comment usefully on each chapter. Thus, I will only mention the ones that I found particularly helpful, and refer the reader to Kahneman's helpful introductory chapter for the many other worthy contributions that will address various readers' particular interests.
The papers in part 2, on the non-linearity of decision weights, are most welcome because...