Recently we used the maximum entropy principle for finding the price density in a multi agent insurance market. The result is similar to what the Buhlmann had obtained by maximizing the utility function. Here we begin with the price density that is derived by applying the maximum entropy principle to a conservative economic system (exchange market), then reverse the Buhlmann calculation to find...

Despite the vital role of the utility function in welfare measurement, the implications of working with incorrect utility specifications have been largely neglected in the choice experiments literature. This paper addresses the importance of specification with a special emphasis on the effects of mistaken assumptions about the marginal utility of income. Monte Carlo experiments were conducted u...

Probabilistic independence can dramatically simplify the task of eliciting, representing, and computing with probabilities in large domains. A key technique in achieving these benefits is the idea of graphical modeling. We survey existing notions of independence for utility functions in a multi-attribute space, and suggest that these can be used to achieve similar advantages. Our new results co...

Insurance as a financial instrument has been used for a long time. The dramatic increase in competition within the insurance sector (in terms of providers coupled with awareness for the need for insurance) has concomitantly resulted in more policy options being available in the market. The insurance seller needs to know the buyer’s preference for an insurance product accurately. Based on such m...

UTA methods use linear programming techniques for finding additive utility functions that best explain stated preferences. However, most UTA methods including the popular UTA-Star are limited to monotonic preferences. UTA-NM (Non Monotonic) is inspired by UTA Star but allows non-monotonic partial utility functions if they decrease total model error. The shape of the utility functions is determi...

This paper studies the problem of multi-agent planning in the environment where agents may need to cooperate in order to achieve their individual goals but they do so only if the cooperation is beneficial to each of them. We assume that each agent has a reward function and a cost function that determines the agent’s utility over all possible plans. The agents negotiate to form a joint plan thro...

In this paper, a non-mediated multi-issue bilateral bargaining model for complex utility functions is presented. Before the negotiation process, a genetic algorithm (GA) is used to sample one’s own utility function. During the negotiation process, genetic operators are applied over the opponent’s and one’s own proposals in order to sample new proposals that are interesting for both parties.

This paper proposes a methodological approach for eliciting farmers' utility functions. The methodology is non-interactive, in that the parameters defining the utility function are obtained by observing the actual behaviour adopted by farmers without resorting to the use of questions on random lotteries. The methodology recognises that the farmer attempts to achieve several objectives, most of ...

Warranty is a powerful implement for marketing strategy that is used by manufacturersand creates satisfaction for consumers by ensuring to compensate for incorrect operation of the product. Warranty serviceresults ina cost named warranty cost for a manufacturer.This cost is a function of warranty policy, regions, and product failures pattern. Since this service coversthe cost of uncertain failu...