ON CERTAINTY EFFECT IN EXPECTED UTILITY THEORY
نویسندگان
چکیده
منابع مشابه
Cautious Expected Utility and the Certainty Effect∗
Many violations of the Independence axiom of Expected Utility can be traced to subjects’ attraction to risk-free prospects. The key axiom in this paper, Negative Certainty Independence (Dillenberger, 2010), formalizes this tendency. Our main result is a utility representation of all preferences over monetary lotteries that satisfy Negative Certainty Independence together with basic rationality ...
متن کاملExpected Uncertain Utility Theory†
We introduce and analyze expected uncertain utility theory (EUU). A prior and an interval utility characterize an EUU decision maker. The decision maker transforms each uncertain prospect into an interval-valued prospect that assigns an interval of prizes to each state. She then ranks prospects according to their expected interval utilities. We define uncertainty aversion for EUU, use the EUU m...
متن کاملNon-expected Utility Theory
The expected utility/subjective probability model of risk preferences and beliefs has long been the preeminent model of individual choice under conditions of uncertainty. It exhibits a tremendous flexibility in representing aspects of attitudes toward risk, has a well-developed analytical structure, and has been applied to the analysis of gambling, games of strategy, incomplete information, ins...
متن کاملExpected Utility Theory
This is a chapter for the forthcoming Handbook of Rational and Social Choice, Paul Anand, Prasanta Pattanaik, and Clemens Puppe, eds., Oxford University Press, 2008. We review classic normative expected utility theory. Our goal is to frame the subsequent chapters (which consider more modern extensions to and deviations from this classic theory) in a way that is accessible to the nonspecialist b...
متن کاملCautious Expected Utility and the Certainty E¤ect
One of the most prominently observed behavior patterns in decision making under risk is the certainty e¤ect: subjects tend to overvalue risk-free prospects, even in violation of expected utility, as shown, for example, in the Allais paradoxes. This tendency is captured behaviorally by Negative Certainty Independence (NCI), which requires that if a decision maker prefers the lottery p over a cer...
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ژورنال
عنوان ژورنال: Journal of the Operations Research Society of Japan
سال: 1983
ISSN: 0453-4514,2188-8299
DOI: 10.15807/jorsj.26.357