Entrepreneurship scholars are interested in understanding and describing how entrepreneurs make decisions under uncertainty, where the probabilities of outcomes are not known but perceived, resulting in ambiguous probabilities. In this context, ambiguity refers to the lack of precise and...

We challenge the standard definition of economic rationality as consistency by making use of a novel distinction between axioms of decision theory: consistency and preference axioms. We argue that this distinction has been overlooked by the literature and, as a result, evidence that consistency...

Artificial Intelligence (AI) scientists are challenged to create intelligent, autonomous agents that can make rational decisions. In this challenge, they confront two questions: what decision theory to follow and how to implement it in AI systems. This paper provides answers to these questions...

Loss aversion postulates that people prefer avoiding losses over acquiring gains of equal size. It is a central part of prospect theory and, according to Daniel Kahneman, "the most significant contribution of psychology to behavioral economics" (Kahneman, 2011, p. 300). It has powerful...

Loss aversion postulates that people prefer avoiding losses over acquiring gains of equal size. It is a central part of prospect theory and, according to Daniel Kahneman, “the most significant contribution of psychology to behavioral economics” (Kahneman, 2011, p. 300). It has powerful...

We propose and axiomatize a new model of incomplete preferences under uncertainty, which we call hope-and-prepare preferences. An act is considered more desirable than another when, and only when, both an optimistic evaluation, computed as the welfare level attained in a best-case scenario, and...

Promoting household-level adaptation measures is an important part of climate change adaptation policies to reduce vulnerability to droughts for (agro-)pastoral communities in sub-Saharan Africa. To develop effective supportive policies, it is important to get a better understanding of the needs...

Understanding when and why nudges work is crucial for designing interventions that consistently and reliably change behaviour. This paper explores the relationship between decision-making speed and the effectiveness of two nudges – carbon footprint labelling and menu repositioning – aimed at...

We present a theory of context-dependent risk preferences under which within-state payoff comparisons and regret aversion shape decisions. Defining the attraction and compromise effect in reference to a state-space-based description of the choice problem, we show that our theory can account for...

We explore the role of memory for choice behavior in unfamiliar environments. Using a unique data set, we document that decision makers exhibit a "memory premium." They tend to choose in-memory alternatives over out-of-memory ones, even when the latter are objectively better. Consistent with...

Purpose The purpose of this study is to investigate the impact of behavioral biases on investment decisions through a serial mediation of overconfidence and disposition effects. Design/methodology/approach The authors assess the behavioral biases affecting the investment decisions of life...

We propose and axiomatize a new model of incomplete preferences under uncertainty, which we call hope-and-prepare preferences. An act is considered more desirable than another when, and only when, both an optimistic evaluation, computed as the welfare level attained in a best-case scenario, and...

The main goal of this study is to document the Non-Utopian Unreal Scenarios -or NUUS- and to propose a mathematical approach, presenting them as a strategic tool that seeks to contribute to decision-making processes in various fields, in addition to those already existing, such as, for example,...

At the start of the Coronavirus Disease (COVID-19) vaccination campaign in Mexico, the vaccine was the world's most essential and scarce asset. Managing its administration to optimize its use was, and still is, of paramount importance. However, when the first vaccine was developed at the end of...

Deliberative decision-making is often proposed as a mechanism to mitigate polarization in democratic processes. However, empirical evidence remains mixed, with some studies suggesting that deliberation among like-minded individuals can drive preference shifts toward extremes. We use a...

This paper introduces a framework for selecting policies that maximize expected welfare under estimation uncertainty. The proposed method explicitly balances the size of the estimated welfare against the uncertainty inherent in its estimation, ensuring that chosen policies meet a reporting...