SHOULD WE USE SIMULTANEOUS-EQUATIONS TO MODEL DECISION-MAKING - A METHODOLOGICAL NOTE

This paper argues for a careful consideration of the methodological un derpinnings of positive decision theory. Two state-of-the-art papers p ublished in Econometrica, which support a variety of often contradicto ry conclusions about the empirical validity of the expected utility mo del, are used to motivate a discussion of what models might be for, an d therefore what criteria should be used to determine their acceptance or rejection. It is suggested that progress in positive decision theo ry would be advanced if greater attention were given to causal structu res and that this may, in turn, merit the use of simultaneous equation techniques.