Should we use simultaneous equations to model decision-making? A methodological note

This paper argues for a careful consideration of the methodological underpinnings of positive decision theory. Two state-of-the-art papers published in Econometrica, which support a variety of often contradictory conclusions about the empirical validity of the expected utility model, are used to motivate a discussion of what models might be for, and therefore what criteria should be used to determine their acceptance or rejection. It is suggested that progress in positive decision theory would be advanced if greater attention were given to causal structures and that this may, in turn, merit the use of simultaneous equation techniques.