Most real life decisions involve multiple-stages, that is a sequence of actions and events over time. There is a well developed theory of decision making, called dynamic programming, that is used to prescribe the optimal way to make multiple-stage decisions. This theory is based on three fundamental principles: Dynamic consistency, consequentialism, and substitutability. However, most of the past experimental research investigating the fundamental principles of decision making has been based on single-stage decisions. Thus, the empirical validity of the three fundamental principles of dynamic programming remain untested, and there is a need for fundamental research on multiple-stage decisions. Dynamic programming theory is an optimal theory that is not based on psychological principles. An alternative psychological theory of decision making, called decision field theory, has important implications for multiple-stage decisions. Specifically, dynamic consistency and substitutability are predicted to be violated by human decision makers under certain conditions specified by the decision field theory. The purpose of the proposed research is to conduct three sets of experiments, where each set is designed to empirically test one of the three principles of dynamic programming. The experiments are designed to produce conditions predicted by decision field theory to lead to violations of two of the three principles.
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