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Author : Peter Klibanoff
Publisher :
ISBN 13 :
Total Pages : pages
Book Rating : 4.:/5 (56 download)
Download or read book A Smooth Model of Decision Making Under Ambiguity written by Peter Klibanoff and published by . This book was released on 2002 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt:
Author : Peter Klibanoff
Publisher :
ISBN 13 :
Total Pages : 0 pages
Book Rating : 4.:/5 (593 download)
Download or read book A Smooth Model of Decision Making Under Ambiguity written by Peter Klibanoff and published by . This book was released on 2002 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Author : Johanna Etner
Publisher :
ISBN 13 :
Total Pages : 0 pages
Book Rating : 4.:/5 (137 download)
Download or read book Decision Theory Under Ambiguity written by Johanna Etner and published by . This book was released on 2012 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: Abstract We review recent advances in the field of decision making under uncertainty or ambiguity. We start with a presentation of the general approach to a decision problem under uncertainty, as well as the 'standard' Bayesian treatment and issues with this treatment. We present more general approaches (Choquet expected utility, maximin expected utility, smooth ambiguity and so forth) that have been developed in the literature under the name of models of ambiguity sensitive preferences. We draw a distinction between fully subjective models and models incorporating explicitly some information. We review definitions and characterizations of ambiguity aversion in these models. We mention the challenges posed by some of the models presented. We end with a review of part of the experimental literature and applications of these models to economic settings.
Author : Mark Machina
Publisher : Newnes
ISBN 13 : 0444536868
Total Pages : 897 pages
Book Rating : 4.4/5 (445 download)
Download or read book Handbook of the Economics of Risk and Uncertainty written by Mark Machina and published by Newnes. This book was released on 2013-11-14 with total page 897 pages. Available in PDF, EPUB and Kindle. Book excerpt: The need to understand the theories and applications of economic and finance risk has been clear to everyone since the financial crisis, and this collection of original essays proffers broad, high-level explanations of risk and uncertainty. The economics of risk and uncertainty is unlike most branches of economics in spanning from the individual decision-maker to the market (and indeed, social decisions), and ranging from purely theoretical analysis through individual experimentation, empirical analysis, and applied and policy decisions. It also has close and sometimes conflicting relationships with theoretical and applied statistics, and psychology. The aim of this volume is to provide an overview of diverse aspects of this field, ranging from classical and foundational work through current developments. Presents coherent summaries of risk and uncertainty that inform major areas in economics and finance Divides coverage between theoretical, empirical, and experimental findings Makes the economics of risk and uncertainty accessible to scholars in fields outside economics
Author : Luigi Luini
Publisher : Springer Science & Business Media
ISBN 13 : 1461550831
Total Pages : 360 pages
Book Rating : 4.4/5 (615 download)
Download or read book Uncertain Decisions written by Luigi Luini and published by Springer Science & Business Media. This book was released on 2012-12-06 with total page 360 pages. Available in PDF, EPUB and Kindle. Book excerpt: Uncertain Decisions: Bridging Theory and Experiments presents advanced directions of thinking on decision theory - in particular the more recent contributions on non-expected utility theory, fuzzy decision theory and case-based theory. This work also provides theoretical insights on measures of risk aversion and on new problems for general equilibrium analysis. It analyzes how the thinking that underlies the theories described above spills over into real decisions, and how the thinking that underlies these real decisions can explain the discrepancies between theoretical approaches and actual behavior. This work elaborates on how the most recent laboratory experiments have become an important source both for evaluating the leading theory of choice and decision, and for contributing to the formation of new models regarding the subject.
Author : P.P. Wakker
Publisher : Springer Science & Business Media
ISBN 13 : 940157815X
Total Pages : 203 pages
Book Rating : 4.4/5 (15 download)
Download or read book Additive Representations of Preferences written by P.P. Wakker and published by Springer Science & Business Media. This book was released on 2013-03-14 with total page 203 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Author : Hillel J. Einhorn
Publisher :
ISBN 13 :
Total Pages : 50 pages
Book Rating : 4.:/5 (227 download)
Download or read book Decision Making Under Ambiguity written by Hillel J. Einhorn and published by . This book was released on 1986 with total page 50 pages. Available in PDF, EPUB and Kindle. Book excerpt: Ellsberg's paradox demonstrates that ambiguous or vague probabilities derived from choices between gambles are not coherent. A descriptive model of judgement under ambiguity is developed in which an initial estimate serves as a starting point and adjustments are made for abbiguity. The adjustments involve a mental simulation in which higher and lower probabilities are considered and differentially weighted. Implications of this model include ambiguity avoidance and seeking; sub- and superadditivity of complementary probabilities; dynamic ambiguity; and reversals in the meaning of data. Three experiments involving Ellsberg's paradox and the setting of buying and selling prices for insurance and warranties test the model. A choice rule under ambiguity is developed that implies a lack of independence between ambiguous probabilities and the sign of payoff utility. The applicability of the model to the case where probabilities are explicitly stated is considered, including the handling of context effects. Keywords: Ambiguity, Decision making, Insurance.
Author : Lars Peter Hansen
Publisher : Princeton University Press
ISBN 13 : 0691170975
Total Pages : 453 pages
Book Rating : 4.6/5 (911 download)
Download or read book Robustness written by Lars Peter Hansen and published by Princeton University Press. This book was released on 2016-06-28 with total page 453 pages. Available in PDF, EPUB and Kindle. Book excerpt: The standard theory of decision making under uncertainty advises the decision maker to form a statistical model linking outcomes to decisions and then to choose the optimal distribution of outcomes. This assumes that the decision maker trusts the model completely. But what should a decision maker do if the model cannot be trusted? Lars Hansen and Thomas Sargent, two leading macroeconomists, push the field forward as they set about answering this question. They adapt robust control techniques and apply them to economics. By using this theory to let decision makers acknowledge misspecification in economic modeling, the authors develop applications to a variety of problems in dynamic macroeconomics. Technical, rigorous, and self-contained, this book will be useful for macroeconomists who seek to improve the robustness of decision-making processes.
Author : Yuanyuan Liu
Publisher :
ISBN 13 :
Total Pages : 0 pages
Book Rating : 4.:/5 (127 download)
Download or read book Individual Decision Making Under Ambiguity and Over Time written by Yuanyuan Liu and published by . This book was released on 2015 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: This dissertation addresses the issue of how to make decisions involving both time delay and ambiguous information. This dissertation is arranged into three chapters. Chapter 1 reviews a set of studies on the influence of ambiguity and time delay on individual decision making and raises two relevant research questions: (1) Are decision makers' ambiguity preferences different for prospects resolved in the present and the future?; and (2) Do decision makers' time preferences differ under ambiguous and unambiguous payoffs? Chapter 2 and 3 are two independent essays, each addressing one of the above questions. The first essay examines ambiguity preferences under present and delayed resolutions across low and high probabilities. Results of three studies show an interaction effect between resolution time and probability level. Under the immediate resolution, we find that individuals exhibit ambiguity aversion at high probabilities and weak ambiguity seeking or indifference at low probabilities, consistent with prior literature. However, delayed resolution regresses aversion and seeking behaviors to neutrality. Drawing on the construal level theory and the dual-process theory, we attribute this interaction effect to the difference in processing styles for present and future prospects. The second essay demonstrates the impact of ambiguous future payoffs on intertemporal preferences. Six studies show that, despite the fact that ambiguous and delayed payoffs are generally disliked separately, together they produce a positive effect. That is, ambiguous future payoffs are more likely to be preferred than precise payoffs (with equal expected values) in intertemporal decision-making. We propose the overshadowing hypothesis to explain this effect and rule out three other possibilities. Finally, we establish boundary conditions by systematically examining whether the effect persists at various ambiguity levels and time points.
Author : Robin M. Hogarth
Publisher :
ISBN 13 :
Total Pages : 40 pages
Book Rating : 4.:/5 (227 download)
Download or read book Ambiguity and Competitive Decision Making: Some Implications and Tests. Revision written by Robin M. Hogarth and published by . This book was released on 1988 with total page 40 pages. Available in PDF, EPUB and Kindle. Book excerpt: Contrary to most formal models of decision making under risk and uncertainty that are built on the basis of prescriptive behavioral principles or axioms, this paper derives a descriptive model of decision making under ambiguity based on principles of behavior, i.e., principles that describe how people behave as opposed to how they should behave. The model assumes that people evaluate the impact of ambiguous probabilities by first anchoring on a given value of the unknown probability and then adjusting this by the net effect of imagining or trying out other values the probability could take. The mental simulation process incorporates giving differential weight to the ranges of probability values above and below the anchor where such weight reflects individual and situational variables. In particular, the assumption that people are cautious as opposed to reckless in making decisions, leads to attributing more weight to possible values of probabilities below the anchor when considering potential gains, and the reverse when faced with potential losses. (kr).
Author : Edward F. McClennen
Publisher : Cambridge University Press
ISBN 13 : 9780521360470
Total Pages : 42 pages
Book Rating : 4.3/5 (64 download)
Download or read book Rationality and Dynamic Choice written by Edward F. McClennen and published by Cambridge University Press. This book was released on 1990-05-25 with total page 42 pages. Available in PDF, EPUB and Kindle. Book excerpt: In this major contribution to the theory of rational choice the author sets out the foundations of rational choice, and then sketches a dynamic choice framework in which principles of ordering and independence follow from a number of apparently plausible conditions. However there is potential conflict among these conditions, and when they are weakened to avoid it, the usual foundations of rational choice no longer prevail. The thrust of the argument is to suggest that the theory of rational choice is less determinate than many suppose.
Author : Robin M. Hogarth
Publisher :
ISBN 13 :
Total Pages : 45 pages
Book Rating : 4.:/5 (227 download)
Download or read book Decision Making Under Uncertainty: The Effects of Role and Ambiguity. Revision written by Robin M. Hogarth and published by . This book was released on 1990 with total page 45 pages. Available in PDF, EPUB and Kindle. Book excerpt: In many important decisions, people are uncertain or ambiguous concerning the magnitude of the probabilities of events that can affect outcomes. The classic theory of decision making argues that people's decisions should not be affected by whether knowledge of a probability is precise or ambiguous. This chapter presents a descriptive model of how people cope with ambiguous probabilities in decision making. The model predicts that ambiguity matters. 'Decision weights' associated with ambiguous probabilities are assumed to be reached via an anchoring-and-adjustment process in which people anchor on an estimate of the probability and then adjust this as a result of mentally stimulating alternative values of the probability. The mental simulation process is affected by both the amount of ambiguity and whether outcomes are large or small gains and/or losses. One important factor that determines people's attitudes toward ambiguity is the nature of the role they assume in making decisions. Keywords: Decision making, Attitudes(psychology), Ambiguity, Subjective probability, Risk adverse, Roles. (CP).
Author : Itzhak Gilboa
Publisher : Cambridge University Press
ISBN 13 : 052151732X
Total Pages : 216 pages
Book Rating : 4.5/5 (215 download)
Download or read book Theory of Decision Under Uncertainty written by Itzhak Gilboa and published by Cambridge University Press. This book was released on 2009-03-16 with total page 216 pages. Available in PDF, EPUB and Kindle. Book excerpt: This book describes the classical axiomatic theories of decision under uncertainty, as well as critiques thereof and alternative theories. It focuses on the meaning of probability, discussing some definitions and surveying their scope of applicability. The behavioral definition of subjective probability serves as a way to present the classical theories, culminating in Savage's theorem. The limitations of this result as a definition of probability lead to two directions - first, similar behavioral definitions of more general theories, such as non-additive probabilities and multiple priors, and second, cognitive derivations based on case-based techniques.
Author : Paul Anand
Publisher : OUP Oxford
ISBN 13 : 0191608769
Total Pages : 608 pages
Book Rating : 4.1/5 (916 download)
Download or read book The Handbook of Rational and Social Choice written by Paul Anand and published by OUP Oxford. This book was released on 2009-01-15 with total page 608 pages. Available in PDF, EPUB and Kindle. Book excerpt: The Handbook of Rational and Social Choice provides an overview of issues arising in work on the foundations of decision theory and social choice over the past three decades. Drawing on work by economic theorists mainly, but also with contributions from political science, philosophy and psychology, the collection shows how the related areas of decision theory and social choice have developed in their applications and moved well beyond the basic models of expected utility and utilitarian approaches to welfare economics. Containing twenty-three contributions, in many cases by leading figures in their fields, the handbook shows how the normative foundations of economics have changed dramatically as more general and explicit models of utility and group choice have been developed. This is perhaps the first time these developments have been brought together in a manner that seeks to identify and make accessible the recent themes and developments that have been of particular interest to researchers in recent years. The collection will be of particular value to researchers in economics with interests in utility or welfare but it will also be of interest to any social scientist or philosopher interested in theories of rationality or group decision-making.
Author : Ward, Patrick S.
Publisher : Intl Food Policy Res Inst
ISBN 13 :
Total Pages : 34 pages
Book Rating : 4./5 ( download)
Download or read book Risk and Ambiguity Preferences and the Adoption of New Agricultural Technologies written by Ward, Patrick S. and published by Intl Food Policy Res Inst. This book was released on with total page 34 pages. Available in PDF, EPUB and Kindle. Book excerpt: Advances in agricultural development have largely been a direct result of increased usage of new technologies. Among other important factors, farmers perceptions of risks associated with the new technology as well as their ability or willingness to take risks greatly influences their adoption decisions. In this paper we conduct a series of field experiments in rural India in order to measure preferences related to risk, potential loss, and ambiguity. Disaggregating by gender, we find that on average women are significantly more risk averse and loss averse than men, though the higher average risk aversion arises due to a greater share of women who are extremely risk averse.
Author : Rafik Aziz Aliev
Publisher : Springer
ISBN 13 : 3642348955
Total Pages : 332 pages
Book Rating : 4.6/5 (423 download)
Download or read book Fundamentals of the Fuzzy Logic-Based Generalized Theory of Decisions written by Rafik Aziz Aliev and published by Springer. This book was released on 2013-01-12 with total page 332 pages. Available in PDF, EPUB and Kindle. Book excerpt: Every day decision making and decision making in complex human-centric systems are characterized by imperfect decision-relevant information. Main drawback of the existing decision theories is namely incapability to deal with imperfect information and modeling vague preferences. Actually, a paradigm of non-numerical probabilities in decision making has a long history and arose also in Keynes’s analysis of uncertainty. There is a need for further generalization – a move to decision theories with perception-based imperfect information described in NL. The languages of new decision models for human-centric systems should be not languages based on binary logic but human-centric computational schemes able to operate on NL-described information. Development of new theories is now possible due to an increased computational power of information processing systems which allows for computations with imperfect information, particularly, imprecise and partially true information, which are much more complex than computations over numbers and probabilities. The monograph exposes the foundations of a new decision theory with imperfect decision-relevant information on environment and a decision maker’s behavior. This theory is based on the synthesis of the fuzzy sets theory with perception-based information and the probability theory. The book is self containing and represents in a systematic way the decision theory with imperfect information into the educational systems. The book will be helpful for teachers and students of universities and colleges, for managers and specialists from various fields of business and economics, production and social sphere.
Author : Laetitia Placido
Publisher :
ISBN 13 :
Total Pages : 224 pages
Book Rating : 4.:/5 (69 download)
Download or read book From Ellsberg to Machina written by Laetitia Placido and published by . This book was released on 2009 with total page 224 pages. Available in PDF, EPUB and Kindle. Book excerpt: How do decision makers act and how should they act when confronted with uncertainty ? Economic behavior under uncertainty is often influenced by the informational structure of the decision context. Remarkably, the joint presence (juxtaposition or combination) of two sources of uncertainty - namely risk (known probability) and ambiguity (unknown probability of events) - gives rise to behaviors that depart from standard models of decision making, subjective expected utility and its extension to non-additive probability, Choquet expected utility ; the essential behavioral component beyond paradoxes of uncertainty is (non neutral) attitude toward ambiguity. The studies reported in this thesis empirically investigate the heterogeneity of ambiguity attitudes in the light of the variability of the features of uncertainty. They deal with two main sorts of cases : the case where a decision maker faces two separate sources of uncertainty (two-color Ellsberg paradox) ; the case where a decision maker faces mixed sources of uncertainty (Machina paradox).
