Similar Search Results

Psychophysics of the Probability Weighting Function

Takahashi, Taiki - 2011

Kahneman-Tversky's prospect theory. Although recent studies in econophysics and neuroeconomics widely utilized probability … theory to derive Prelec's probability weighting function from psychophysical laws of perceived waiting time in probabilistic … function in behavioral psychology were derived. Future directions in the application of the psychophysical theory of …

Persistent link: https://www.econbiz.de/10013122889

Expected Utility with Uncertain Probabilities Theory

Izhakian, Yehuda (Yud) - 2020

This paper introduces a model of decision making under ambiguity by extending the Bayesian approach to uncertain probabilities. In this model, preferences for ambiguity pertain directly to probabilities such that attitude toward ambiguity is defined as attitude toward mean-preserving spreads in...

Persistent link: https://www.econbiz.de/10012857316

A Theory of Quantifiable Beliefs

Karni, Edi; Grant, Simon - 2001

theory of quantifiable beliefs - a form of probabilistic sophistication that does not preclude state-dependent preferences … and does not require the reduction of compound lotteries. The theory includes the state-dependent expected utility model … special cases. The theory is flexible enough to admit recursivity in the decision-making process. One specific example of this …

Persistent link: https://www.econbiz.de/10014141058

Chapter 2. Rationality and Dynamic Consistency Under Risk and Uncertainty

Hammond, Peter J.; Zank, Horst - In: Handbook of the economics of risk and uncertainty : volume 1, (pp. 41-97). 2014

For choice with deterministic consequences, the standard rationality hypothesis is ordinality, i.e., maximization of a weak preference ordering. For choice under risk (resp. uncertainty), preferences are assumed to be represented by the objectively (resp. subjectively) expected value of a von...

Persistent link: https://www.econbiz.de/10014025530

Separating attitudes towards money from attitudes towards probabilities : stake effects and ambiguity as a test for prospect theory

Vieider, Ferdinand M.; Cingl, Lubomír; Martinsson, Peter; … - 2013

Prospect theory (PT) is the dominant descriptive theory of decision making under risk today. For the modeling of …

Persistent link: https://www.econbiz.de/10009792472

Calibration of quantum decision theory, aversion to large losses and predictability of probabilistic choices

Vincent, Sabine; Jukalov, Vjačeslav I.; Kovalenko, Tatyana - 2016

We present the first calibration of quantum decision theory (QDT) to an empirical data set. The data comprise 91 …) the utility factor with a stochastic version of cumulative prospect theory (logit-CPT), and (b) the attraction factor with …

Persistent link: https://www.econbiz.de/10011516615

Second order beliefs models of choice under imprecise risk : non-additive second order beliefs vs. nonlinear second order utility

Giraud, Raphaël - In: Theoretical economics : TE ; an open access journal in … 9 (2014) 3, pp. 779-816

This paper discusses models of choice under imprecise objective probabilistic information featuring beliefs about beliefs -- second order beliefs. A new model, called Second Order Dual Expected Utility (SODEU) featuring non-additive second order beliefs is introduced, axiomatized and...

Persistent link: https://www.econbiz.de/10011674093

Choice deferral and ambiguity aversion

Kopylov, Igor - In: Theoretical economics : TE ; an open access journal in … 4 (2009) 2, pp. 199-228

When confronted with uncertain prospects, people often exhibit both choice deferral and Ellsberg-type ambiguity aversion. This paper obtains a joint representation for these behavioral phenomena. The decision maker as portrayed by my model is willing to choose an uncertain prospect f over g...

Persistent link: https://www.econbiz.de/10011699104

Updating preferences with multiple priors

Hanany, Eran; Klibanoff, Peter - In: Theoretical economics : TE ; an open access journal in … 2 (2007) 3, pp. 261-298

We propose and axiomatically characterize dynamically consistent update rules for decision making under ambiguity. These rules apply to the preferences with multiple priors of Gilboa and Schmeidler (1989), and are the first, for any model of preferences over acts, to be able to reconcile typical...

Persistent link: https://www.econbiz.de/10011702323

Allais, Ellsberg, and preferences for hedging

Dean, Mark; Ortoleva, Pietro - In: Theoretical economics : TE ; an open access journal in … 12 (2017) 1, pp. 377-424

Two of the most well known regularities observed in preferences under risk and uncertainty are ambiguity aversion and the Allais paradox. We study the behav- ior of an agent who can display both tendencies simultaneously. We introduce a novel notion of preference for hedging that applies to both...

Persistent link: https://www.econbiz.de/10011704845