Dynamic decision making: Empirical and theoretical directions

Although most research into risky decision making has focused on simple scenarios-where isolated choices are made independent of one another-many important decisions in life play out across sequences of interdependent events and actions. For example, a student planning for a future career must consider which university to attend, which classes to take, which internships to pursue, and which job opportunities these might eventually lead to. Despite the ubiquity and importance of such decision problems, we know relatively little about how people manage the complexities of dynamic, multistage decisions. The goal of this article is to provide an accessible overview of some of the empirical and theoretical developments taking place in the study of dynamic decision making. We begin with a summary of some general questions being raised, then highlight two important lines of research. The first focuses on testing whether people's choices deviate from the prescriptions of a rational received view. The second instead focuses on individual differences in dynamic decision making, and seeks to classifying people into different types. Finally, we discuss candidate explanations for behavioral findings, alternative avenues of research, and opportunities for their integration.