normative vs. descriptive decision theory

Normative decision theory focuses on how people should make decisions to achieve the best outcome based on logical principles, often emphasizing rationality and consistency. It provides ideal guidelines for choosing the most optimal option, like maximizing happiness or utility. Conversely, descriptive decision theory examines how people actually make decisions in real life, including biases, emotions, and heuristics that influence choices. It aims to understand and predict actual behavior, even if it doesn’t always align with rational models. Essentially, normative theory is about the "best" decision-making standards, while descriptive theory describes how decisions are typically made in practice.