Recent studies on decision analytics frequently refer to the topic of behavioral decision making (BDM), which focuses on behavioral components of decision analytics. This paper provides a critical review of literature for re-examining the relations between BDM and classical decision theories in...

This paper presents an empirical investigation of the relation between decision speed and decision quality for a real-world setting of cognitively-demanding decisions in which the timing of decisions is endogenous: professional chess. Move-by-move data provide exceptionally detailed and precise...

Multi-Criteria Decision Analysis (MCDA) is a sub-discipline of operations research that aims to solve multi-objective optimization problems by evaluating competing factors in decision-making. MCDA supports multidimensional decision-making processes through the analysis of diverse inputs at...

This paper presents an empirical investigation of the relation between decision speed and decision quality for a real-world setting of cognitively-demanding decisions in which the timing of decisions is endogenous: professional chess. Move-by-move data provide exceptionally detailed and precise...

We study an experiment of the students-proposing deferred acceptance mechanism (DA) in matching markets where firms are matched with students. We investigated the two different situations: (i) Students know firms' preferences and firms submit their true preference, (ii) Students know firms'...

District energy systems can not only reduce energy consumption but also set energy supply dispatching schemes according to demand. However, not only the correlation between multiple optimization objectives, but also the time-varying energy demand is ignored when establishing and solving the...

We study the strategic advantages of coarsening one’s utility by clustering nearby payoffs together (i.e., classifying them the same way). Our solution concept, coarse-utility equilibrium (CUE) requires that (1) each player maximizes her coarse utility, given the opponent’s strategy, and (2)...

Recent literature raises concerns about monotonicity conditions required to interpret IV estimates under heterogeneous effects. A prominent example involves random decision-maker IV designs where decision-makers exhibit systematic differences in both preferences and skills. We perform tests of...

This paper examines the cognitive biases in small and medium-sized enterprise (SME) managerial beliefs under exogenous shocks and investigates whether such biases affect firms’ decision-making in the future. We use unique administrative survey data spanning the outbreak of COVID-19 in China...

We present results from experiments containing incentivized school-choice scenarios. In these scenarios, we vary whether schools’ assessments of students are based on a common priority (inducing correlation in admissions decisions) or are based on independent assessments (eliminating...

This paper studies the Random Utility Model (RUM) in a repeated stochastic choice situation, in which the decision maker is imperfectly informed about the payoffs associated to each of the available alternatives. By embedding the RUM into an online decision problem, we develop a gradient-based...

It is well established that the social and economic environment of medical care distinguishes its provision from that of other goods and services. While scholars have studied the influences of this idiosyncratic environment, there is relatively little empirical knowledge about how it affects...

For economists, the task of paramount importance is not only to generalize the experience of the effectiveness of previously introduced economic sanctions but also to study all kinds of effects (both positive and negative) of modern large-scale economic sanctions against Russia. The term...

Anchoring is a robust behavioral phenomenon modeled predominantly as a bias in individual judgment. We propose a game-theoretic model that considers players’ beliefs about others’ behavior as a mediator for the effect of the anchor on a player’s choice. The results establish that anchoring...

In an artefactual field experiment, we implemented a crowdfunding campaign for an institute's summer party and compared donation and contribution framings. We found that the use of the word 'donation' generated higher revenue than the use of 'contribution'. While the individuals receiving the...

Decision theory can be used to test the logic of decision making - one may ask whether a given set of decisions can be justified by a decision-theoretic model. Indeed, in principal-agent settings, such justifications may be required - a manager of an investment fund may be asked what beliefs she...

We propose a class of decisive collective choice rules that rely on a linear ordering to partition the majority relation into two acyclic relations. The first of these relations is used to pare down the set of the feasible alternatives into a shortlist while the second is used to make a final...

This paper presents a model of consumption behavior that explains the presence of ‘wealthy hand-to-mouth’ consumers using a mechanism that differs from those analyzed previously. We show that a two-asset model with temptation preferences generates a demand for commitment and thus...

This paper analyzes a model of innovation diffusion with case-based individuals a la Gilboa and Schmeidler (1995, 1996, 1997), who decide whether to consume an incumbent’s or an entrant’s product based on their and their social neighbors’ previous consumption experience. I analyze how...

This paper provides the first detailed legal and policy analysis of the EU ethics system existing within and across EU institutions.It focuses on both substantive ethics standards - applicable before, while in office and after - and their oversight institutional systems, via an...

Artificial intelligence is rapidly transforming our world. The author describes the fascinating career of Herbert A. Simon, a father of artificial intelligence, renaissance man, and true polymath who made pioneering contributions to fields ranging from economics to psychology and from management...

There is a long ongoing debate on whether interaction in a market influences moral decisions of individuals. While some studies show that individuals tend to decide less morally when being exposed to a market environment, other studies argue that the experience of market interaction promotes...

We investigate various statistical methods for forecasting risky choices and identify important decision predictors. Subjects (n=44) are presented a series of 50/50 gambles that each involves a potential gain and a potential loss, and subjects can choose to either accept or reject a displayed...

We develop a general framework to study contests, containing the well-known models of Tullock (1980) and Lazear & Rosen (1981) as special cases. The contest outcome depends on players' effort and skill, the latter being subject to symmetric uncertainty. The model is tractable, because a...

Recent studies on decision analytics frequently refer to the topic of behavioral decision making (BDM), which focuses on behavioral components of decision analytics. This paper provides a critical review of literature for re-examining the relations between BDM and classical decision theories in...

In a framework of sequential search, we define a decision maker’s time preference, which is endogenous to her optimal decisions and the environment. The induced time preference is non-stationary and context-dependent, which supports key empirical and experimental evidence, such as...

In this brief essay I set out my views on the way in which competition assessments should be conducted so that they be consistent with the standard of proof in EU competition cases and Easterbrook’s error cost minimization principle. My goal is to develop a normative benchmark against which to...

A persistent argument against the transitivity assumption of rational choice theory postulates a repeatable action that generates a significant benefit at the expense of a negligible cost. No matter how many times the action has been taken, it therefore seems reasonable for a decision-maker to...

Behavioral economics provides insights into how people process information and make decisions. It also helps to explain why and how people tend to make decisions that are not in their best interest, as opposed to what rational choice theory would suggest. This chapter provides an introduction to...

This paper is concerned with how the effect of task complexity on behavioural error is better modelled and how the better performance of a stochastic model can be understood in a behavioural sense. Three behavioural error models are considered in this study; each accommodates the complexity...

We use probability-matching variations on Ellsberg’s single-urn experiment to assess three questions: (1) How sensitive are ambiguity attitudes to changes from a gain to a loss frame? (2) How sensitive are ambiguity attitudes to making ambiguity easier to recognize? (3) What is the relation...

An axiomatization of expected utility under uncertainty is extended in several steps to characterize more complicated decision models. Central to each step is a bijective mapping that, applied to the set of prospects, changes the framing of the decision problem. Static models of subjective...

There is a wealth of research in psychology demonstrating that agents process information with the aid of categories. In this paper we study this phenomenon in two parts. First, we build a model of how experiences are sorted into categories and how categorization affects decision making. Second,...

A decision maker tests whether the gradient of the loss function evaluated at a judgmental decision is zero. If the test does not reject, the action is the judgmental decision. If the test rejects, the action sets the gradient equal to the boundary of the rejection region. This statistical...

We review the recent literature on rational inattention, identify the main theoretical mechanisms, and explain how it helps us understand a variety of phenomena across fields of economics. The theory of rational inattention assumes that agents cannot process all available information, but they...