Choice under Uncertainty with the Best and Worst in Mind: Neo-additive Capacities

The concept of a non-extreme-outcome-additive capacity (neo-additive capacity ) is introduced. Neo-additive capacities model optimistic and pessimistic attitudes towards uncertainty as observed in many experimental studies. Moreover, neo-additive capacities can be applied easily in economic problems, as we demonstrate by examples. This paper provides an axiomatisation of Choquet expected utility with neo-capacities in a framework of purely subjective uncertainty.

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Year of publication:	2002-09
Authors:	Grant, Simon ; Chateauneuf, A. ; Eichberger, J.
Institutions:	Department of Economics, Rice University

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Series:	Working Papers.
Type of publication:	Book / Working Paper
Language:	English
Classification:	D81 - Criteria for Decision-Making under Risk and Uncertainty
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10005002304