Base-rate neglect is a robust experimental finding that individuals do not update their prior beliefs according to the Bayes’ rule and, typically, underestimate their posterior probabilities. Another empirical finding is that individuals often do not acquire information even when there are no strategic considerations and the cost of new information is justifiable economically. This paper combin...

A Monte Carlo procedure is used to demonstrate the dangers of basing (farm) risk programming on only a few states of nature and to study the impact of applying alternative risk programming methods. Two risk programming formulations are considered, namely mean-variance (E,V) programming and utility efficient (UE) programming. For the particular example of a Norwegian mixed livestock and crop far...

In medical research, clinical practice must often be undertaken with imperfect information from limited resources. This study applied Bayesian imperfect information-value analysis to realistic situations to produce likelihood functions and posterior distributions, to a clinical decision-making problem for recurrent events. In this study, three kinds of failure models are considered, and our met...

Databases are models of the real world. Yet, our knowledge of the real world is often imperfect, thus challenging our ability to create databases of integrity. To uphold the integrity of a database in situations where knowledge of the real world is imperfect, one may either (1) restrict the model to that portion of the real world about which perfect information is available, or (2) develop form...