Fishers’ trip choice behavior in Hawaii’s longline fishery was analyzed by applying a utility theoretic mixed model (a combination of the conditional and multinomial logit (unordered) models) which accounts for both choiceand individual-specific attributes. The results indicate that fishers demonstrated utility maximizing and risk-averse behavior. They exhibited ‘inertia’ in switching to altern...

Stochastic domains often involve risk-averse decision makers. While recent work has focused on how to model risk in Markov decision processes using risk measures, it has not addressed the problem of solving large risk-averse formulations. In this paper, we propose and analyze a new method for solving large risk-averse MDPs with hybrid continuous-discrete state spaces and continuous action space...

Consider a dynamic decision making model under risk with a fixed planning horizon, namely the dynamic capacity control model. The model describes a firm, operating in a monopolistic setting and selling a range of products consuming a single resource. Demand for each product is time-dependent and modeled by a random variable. The firm controls the revenue stream by allowing or denying customer r...

We consider an auction setting where the buyers are risk averse with correlated private valuations (CARA preferences, binary types), and characterize the optimal mechanism for a risk neutral seller. We show that the optimal auction extracts all buyer surplus whenever the correlation is sufficiently strong (greater than 1/3 in absolute value), no matter how risk averse the buyers are. In contras...

OBJECTIVE To determine the effects of an adversary's behavior on the defender's accurate and timely detection of network threats. BACKGROUND Cyber attacks cause major work disruption. It is important to understand how a defender's behavior (experience and tolerance to threats), as well as adversarial behavior (attack strategy), might impact the detection of threats. In this article, we use co...

This note shows that for two inequality averse social welfare functions, if one is more inequality averse than the other, the household preference induced by optimally allocating aggregate bundles according to this social welfare function is more risk averse than the other. We present examples showing that this comparative static can be reversed if inequality aversion is dropped. We show that t...

This paper examines the relationship between two types of preference: preference of intertemporal choices and preference towards risk. In the simplest form of the constant relative risk aversion utility function, the intertemporal elasticity of substitution (IES) and risk aversion has an inverse relationship. However, there is no empirical evidence that suggests this inverse relationship holds....

We introduce a novel group elevator scheduler based on an explicit decision-theoretic calculation for the expectation of any polynomial function of passengers’ waiting times, marginalized over sources of uncertainty in the system state. The same framework can be used to identify risky assignments that have low expected costs but may cause some individuals to be ”stranded” with excessive waits f...