People do not reason logically, but decision making encompasses all human behaviour. Choices can be rational (internally consistent). People expect choices to show transitivity. If a relationship holds between item one and item two and between item two and item three then the relationship should also hold between item one and item three. Utility is the personal value we attach to outcomes rather than to their absolute monetary value.Normative theories of decision making imply that some choices are better than other choices. The optimal choice in normative theories depends on the theory. The expected value theory states that the optimal choice is the choice that offers the largest financial payoff. People also tend to go for choices with the maximum utility. People are not always consistent in their choices with expected value and utility, as this requires a lot of time and motivation. There are two principles in rational decision making:Description invarianceThe description of the choice should not make any difference as long as basic structure of the choices is the same. Procedure invarianceThe procedure of decision making should not make any difference in the decision that people make. People are inconsistent with this. Psychic budgets refers to how we mentally categorize money that we have spent or are contemplating to spend. Sunk cost refers to an investment that is irretrievably spent and should not influence present decision making, but still does, as people want to get their investment out of it as much as they can. People also make decisions based on loss aversion, the unpleasantness of a loss is bigger than the pleasure of a similar gain. Therefore, people make decisions based on aversion of the unpleasantness of a loss. Satisficing refers to selecting the first choice that satisfies a certain demand (e.g: cost of a phone). People use satisficing to prevent them from having to compare everything with each other.People tend to...