This paper reports the results of experiments designed to test whether and to what extent individuals succumb to the conjunction fallacy. Using the Kahneman and Tversky (1983) experimental design, we find that given mild incentives, the proportion of individuals who violate the conjunction...

Utility theory with uncertainty describes a class of models designed to formalize the manner in which a decision maker chooses among alternative courses of action when the consequences of each course of action are not known at the time the choice is made. The distinguishing characteristic of the...

This chapter reviews developments in the theory of decision making under risk and uncertainty, focusing on models that, over the last 40 years, dominated the theoretical discussions. It also surveys some implications of the departures from the “linearity in the probabilities” aspect of...

This chapter provides a critical review of the theories of decision making under risk and under uncertainty and the notion of choice-based subjective probabilities. It includes formal statements and discussions of the various models, including their analytical frameworks, the corresponding...

Preventive dental care and automotive service is intended to prevent problems that, if they materialized, would require costly treatment or repair. In these markets fraud is both persistent and pervasive. This paper analyzes these markets invoking the notion of weak perfect Bayesian equilibrium...