The Experimentation of Bounded Rationality Behavior in Individual Decision-making

Prospect theory has challenged the decision-making principle of expected utility maximization which based on rationality .According to the prospect theory, there are some bounded rationality such as frame effect, reference point and certainty effect in individual decision making under conditions of uncertainty. There are 120 undergraduates of University of Engineering Heibei which are made the subjects of the laboratory experiment, the experiment showing that the attitudes to risk are different under uncertainty. The difference which is from attitudes to risk indicates the decision making of individual is not only prompted by expected utility, but also influenced by many kinds of psychological factors. The result implies that there are some bounded rationality psychological characteristics, such as the frame effect, reference point and certainty effect.