In traditional econometrics, the quality of an individual investment -- and of the investment portfolio -- is characterized by its expected return and its risk (variance). For an individual investment or portfolio, we can estimate the future expected return and a future risk by tracing the...

According to decision making theory, if we know the user's utility Ui=U(si) of all possible alternatives si, then we can uniquely predict the user's preferences. In practice, we often only know approximate values Vi~Ui of the user's utilities. Based on these approximate values, we can only make...