The single decision maker chooses one of the actions repeatedly. She chooses the action with the highest weighted average of the past payoffs. In the long run either the action with highest expected payoff or the action with highest minimal payoff is chosen depending on how weights evolve.

This note provides an alternative derivation of the leximin principle using the framework of Harsanyi’s (1953) equi-probability model. We demonstrate that the leximin principle is concluded if and only if the preference ordering of the impartial observer obeys strong monotonicity and complete...

This note axiomatizes the incomplete preference ordering that reflects statewise dominance with respect to expected utility, as well as the according choice correspondence. The main motivation is to clarify how admissibility as understood by statisticians relates to existing axiomatizations. The...

Generally, in the standard presentation of the expected utility model, the risk premium represents how much a risk-averse decision maker is ready to pay to have a risk eliminated. Here, however, we introduce a different risk premium: how much should a risk (which could be the return on a...

In three binary choice problems, people reveal a choice pattern which falsifies expected utility theory and many generalized non-expected utility theories. This new paradox challenges popular non-expected utility models analogously to how the Allais paradox challenged neoclassical expected...

Many choice-theoretic and game-theoretic applications in Economics invoke some form of supermodularity or increasing differences for objective functions defined on lattices. These notes provide axiomatic foundations for these properties on expected-utility representations of preferences over...

The U.S. prewar output series exhibit smaller shock-persistence than postwar-series. Some studies suggest that this may be due to linear interpolation used to generate missing prewar data. Monte Carlo simulations that support this view generate large standard-errors, making such inference...