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Decision theory (or the theory of choice) (1)is the study of the reasoning underlying an agent's choices. representativeness heuristic exampleSay, for example, Fast Food ABC expanded its operations to India and its stock price soared. An analyst noted that India is a profitable venture for all fast food chains. Therefore, when Fast Food XYZ announced its plan to explore the Indian market the following year, the analyst wasted no time in giving XYZ a "buy" recommendation. Decision theory can be broken into (..) branchesnormative decision theory, which gives advice on how to make the best decisions, given a set of uncertain beliefs and a set of values; descriptive decision theory, which analyzes how existing, possibly irrational agents actually make decision