The decision-making rules

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At times we all regret decisions. Does this necessarily mean we did not use the economic decision rule when making decision?

There is no single decision rule in economics. When it comes to making decisions, economics draws heavily on statistical decision theory. And statistical decision theory suggests that there are at least two approaches to decision-making: an individual may attempt to maximize gains (risk-seeking) or to minimize losses (risk avoidance, aka regret minimization, aka risk aversion). Economics recognizes that some individuals are risk seekers, while others are regret minimizers…

What makes it all really weird is that the same individual can display both risk-seeking and risk-averting traits, depending on how much is at stake. People routinely blow a few dollars here and there on lottery tickets, while at the same time carrying large-denomination life and property insurance policies…

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