This paper derives conditions under which the standard decomposition of unconditional expected utility into marginal probabilities and conditional expected utilities generalizes to Cumulative Prospect Theory. The results are relevant for empirical analyses in which marginal probabilities are used as explanatory variables.

This chapter considers a situation in which the elicitor wants to discover the precise form of a function which characterizes a subject’s preferences or probabilistic beliefs. All of the "scoring-rule" elicitation procedures developed have a common structure: the subject’s expected utility depends on a function reported by the subject, and the elicitor uses the reported function to calculate th...

This paper proposes a theory of subjective expected utility based on primitives only involving the fact that an act can be judged either “attractive” or “unattractive”. We give conditions implying that there are a utility function on the set of consequences and a probability distribution on the set of states such that attractive acts have a subjective expected utility above some threshold. The ...

Ellsberg’s experiment involved a gamble with no ambiguity (N) and a gamble where the prize that could be won is objectively known, but the winning probability depends on the (ambiguous) urn’s composition (P). We extend this by including a gamble where the winning probability is objectively known, but the prize depends on the urn’s composition (C), and also gambles where both the probability and...

This paper characterises the insurance demand in terms of the entropy of the underlying probability distribution for losses. A characterisation of this nature provides the prediction that insurance for large losses with small probabilities tends to be purchased less frequently than insurance for moderate losses with higher probabilities, without deviating from the standard expected utility fram...

“Statistical Viewpoint” addresses principles of statistics useful to practitioners in compliance and validation. We intend to present these concepts in a meaningful way so as to enable their application in daily work situations. Reader comments, questions, and suggestions are needed to help us fulfill our objective for this column. Suggestions for future discussion topics or questions to be add...

When real-valued utilities for outcomes are bounded, or when all variables are simple, it is consistent with expected utility to have preferences defined over probability distributions or lotteries. That is, under such circumstances two variables with a common probability distribution over outcomes – equivalent variables – occupy the same place in a preference ordering. However, if strict prefe...

This research has been supported by NSF Grant SES-0001925. I am indebted to Hans Colonius for many helpful discussions and for critically reading the earlier version of this paper. I am grateful to Robin Thomas, Jean-Claude Falmagne, and three anonymous reviewers for helpful suggestions. In particular, Falmagne and one reviewer pointed out flaws in my initial treatment of the relationship betwe...

We show how powerful algorithms recently developed for counting lattice points and computing volumes of convex polyhedra can be used to compute probabilities of a wide variety of events of interest in social choice theory. Several illustrative examples are given.

in order to determine the appropriate plant density in different planting dates for sweet corn cultivar ksc403su, an experiment was conducted using a randomized complete block design in split plot lay out with three replications at seed and plant improvement institute in karaj in 2006. three planting dates (22 may, 5 june and 22 june) were assigned as main plots and three plant densities (65000...