Advances in Decision Making Under Risk and Uncertainty (eBook)

Mohammed Abdellaoui, John D. Hey (Herausgeber)

eBook Download: PDF

2008 | 2008
XIV, 242 Seiten
Springer Berlin (Verlag)
978-3-540-68437-4 (ISBN)

Infos

Whether we like it or not we all feel that the world is uncertain. From choosing a new technology to selecting a job, we rarely know in advance what outcome will result from our decisions. Unfortunately, the standard theory of choice under uncertainty developed in the early forties and fifties turns out to be too rigid to take many tricky issues of choice under uncertainty into account. The good news is that we have now moved away from the early descriptively inadequate modeling of behavior. This book brings the reader into contact with the accomplished progress in individual decision making through the most recent contributions to uncertainty modeling and behavioral decision making. It also introduces the reader into the many subtle issues to be resolved for rational choice under uncertainty.

Inhalt

Preface 5
Contents 9
Contributors 11
Part I 14
Uncertainty and Information Modeling 14
Revealed Ambiguity and Its Consequences: Updating 15
1 Introduction 15
2 Preliminaries 17
3 Some Derived Concepts 20
4 Revealed Ambiguity and Updating 22
Appendix 25
Notes 30
References 30
Dynamic Decision Making When Risk Perception Depends on Past Experience 31
1 Introduction 31
2 Behavior at a Point of Time 33
3 Dynamic Choice 36
4 An Insurance Demand Illustration 39
5 Concluding Remarks 43
References 44
Representation of Conditional Preferences Under Uncertainty 45
1 Introduction 45
2 Axioms 48
3 Representation Results 51
4 Concluding Remark 54
Notes 58
References 58
Subjective Information in Decision Making and Communication 60
1 Introduction 60
2 Perception 61
3 Communication 67
4 Conclusion 72
Notes 72
References 73
Risk Modeling 74
Sensitivity Analysis in Decision Making: A Consistent Approach 75
1 Introduction 75
2 Sensitivity Analysis for Decision Analysis Models with Given Probabilities 78
3 Sensitivity Analysis with Uncertainty: The Expected Value Problem 88
4 Sensitivity Analysis with Uncertainty: The State of Belief Problem 90
5 Conclusions 93
Notes 94
Appendix 1: Proofs 95
References 98
Alternation Bias and the Parameterization of Cumulative Prospect Theory 100
1 Introduction 100
2 Local Representativeness Effect 102
3 Application to the St. Petersburg Gamble 102
4 Conclusion 108
Appendix 1: Mathematical Appendix 110
Notes 114
References 114
Proposing a Normative Basis for the S-Shaped Value Function 117
1 Introduction 117
2 An Evolutionary Rationale for the S-Shaped Value Function 118
3 The Impact of Prospects and Behavior on Fitness 119
4 Deriving the S-Shaped Value/Utility Function 120
5 Discussion 125
Notes 126
References 126
Experimental Individual Decision Making 127
Individual Choice from a Convex Lottery Set: Experimental Evidence 128
1 Introduction 128
2 Experimental Design 129
3 Theoretical Considerations 130
4 Original and High Stake Experiment 132
5 Transparency Experiment 136
6 Summary 137
Notes 138
References 139
Temptations and Dynamic Consistency 143
1 Introduction 143
2 The Theory Tested 144
3 The Experimental Design 145
4 The Data Analysis 147
5 Conclusions 149
Appendix 1The Consent Form, the Instructions and the DebriefingQuestionnaire and Statement 150
I Instructions for the Experiment 151
II Instructions for the Experiment 152
Appendix 2 The Implications of Alternative Mappings from the Indices to the Weightings 155
References 156
Monty Hall’s Three Doors for Dummies 157
1 Introduction 157
2 The Problem 158
3 The New Experimental Design 159
4 The Experiment 160
5 Discussion 165
6 Conclusion and a Final Remark 166
Notes 167
References 167
Overconfidence in Predictions as an Effect of Desirability Bias 169
1 Introduction 169
2 Study 1 171
3 Study 177
4 Summary and Conclusions 184
References 185
Experimental Interactive Decision Making 187
Granny Versus Game Theorist: Ambiguity in Experimental Games 188
1 Introduction 188
2 Ambiguity in Strategic Games 189
3 Design 193
4 Hypotheses and Results 195
5 Concluding Discussion 204
Appendix 1: Example of Instructions: Treatment gt (Translation) 205
Notes 207
References 208
Guessing Games and People Behaviours: What Can We Learn? 210
1 Introduction 210
2 A Generalisation of the INBR Strategy to a Game with Interior Equilibria 212
3 Aim and Setting of the Experiment 214
4 Results and Interpretation 215
5 Conclusions 219
Notes 221
References 222
The Determinants of Individual Behaviour in Network Formation: Some Experimental Evidence 223
1 Introduction 223
2 The Experimental Design 225
3 Results 229
4 Conclusions 241
Appendix 1: Instructions (English Translation) 241
Notes 244
References 245

Produkt-Details

• Erscheint lt. Verlag: 17.9.2008
• Reihe/Serie: Theory and Decision Library C
• Reihe/Serie: Theory and Decision Library C
• Zusatzinfo: XIV, 242 p. 57 illus.
• Verlagsort: Berlin
• Sprache: englisch
• Themenwelt: Mathematik / Informatik ► Mathematik ► Statistik
• Themenwelt: Technik
• Themenwelt: Wirtschaft ► Allgemeines / Lexika
• Themenwelt: Wirtschaft ► Betriebswirtschaft / Management ► Planung / Organisation
• Themenwelt: Wirtschaft ► Volkswirtschaftslehre
• Schlagworte: Ambiguity • Expected Utility • Intertemporal Decision Making • Modeling • Probability • Risk • Uncertainty • Utility
• ISBN-10: 3-540-68437-9 / 3540684379
• ISBN-13: 978-3-540-68437-4 / 9783540684374