Download or read book Essays on Decision Making Under Risk in Decision Theory and Auction Theory written by Mark Schneider and published by . This book was released on 2015 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Advances in Decision Making Under Risk and Uncertainty written by Mohammed Abdellaoui and published by Springer Science & Business Media. This book was released on 2008-08-29 with total page 245 pages. Available in PDF, EPUB and Kindle. Book excerpt: 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.

Download or read book Decision Making Under Risk and Uncertainty written by J. Geweke and published by Springer Science & Business Media. This book was released on 2012-12-06 with total page 256 pages. Available in PDF, EPUB and Kindle. Book excerpt: As desired, the infonnation demand correspondence is single valued at equilibrium prices. Hence no planner is needed to assign infonnation allocations to individuals. Proposition 4. For any given infonnation price system p E . P (F *), almost every a E A demands a unique combined infonnation structure (although traders may be indifferent among partial infonnation sales from different information allocations, etc. ). In particular, the aggregate excess demand correspondence for net combined infonnation trades is a continuous function. Proof Uniqueness fails only if an agent can obtain the same expected utility from two or more net combined infonnation allocations. If this happens, appropriate slight perturbations of personal probability vectors destroy the equality unless the utility functions and wealth allocations were independent across states. Yet, when utilities and wealths don't depend on states in S, no infonnation to distinguish the states is desired, so that the demand for such infonnation structures must equal zero. To show the second claim, recall that if the correspondence is single valued for almost every agent, then its integral is also single valued. Finally, note that an upper hemicontinuous (by Proposition 2) correspondence which is single valued everywhere is, in fact, a continuous function. [] REFERENCES Allen, Beth (1986a). "The Demand for (Differentiated) Infonnation"; Review of Economic Studies. 53. (311-323). Allen, Beth (1986b). "General Equilibrium with Infonnation Sales"; Theory and Decision. 21. (1-33). Allen, Beth (1990). "Infonnation as an Economic Commodity"; American Economic Review. 80. (268-273).

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.

Download or read book Essays on Decision making Under Risk and Ambiguity in Theory and Laboratory Experiments written by Marie-Charlotte Guetlein and published by . This book was released on 2017 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Progress In Decision Utility And Risk Theory written by Attila Chikán and published by Springer. This book was released on 2012-10-21 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: In this volume we present some of the papers delivered at FUR-IV - the Fourth International Conference on Founda tions and Applications of Utility, Risk and Decision Theory in Budapest, June 1988. The FUR Conferences have provided an appreciated forum every two years since 1982 within which scientists can report recent issues and prospective applications of decision theory, and exchange ideas about controversial questions of this field. Focal points of the presented papers are: expected utility versus alterna tive utility models, concepts of risk and uncertainty, developments of game theory, and investigations of real decision making behaviour under uncertainty and/or in risky situations. We hope that this sample of papers will appeal to a wide spectrum of readers who are interested in and fami liar with this interesting and exciting issues of decision theory. A wide range of theoretical and practical questions is considered in papers included in this volume, and many of them closely related to economics. In fact, there were two Nobel-Laureates in economics among the participants: I. Herbert A. Simon (1978) and Maurice Allais (1988), who won the prize just after the conference. His paper deals with problems of cardinal utility. After a concise overview of the history and theory of cardinal utility he gives an estimate of the invariant cardinal utility function for its whole domain of variation (i. e.

Download or read book Essays In Decision Making written by Mark Mark and published by Springer Science & Business Media. This book was released on 2012-12-06 with total page 429 pages. Available in PDF, EPUB and Kindle. Book excerpt: The pioneering study by Bowman [1980) reawakened interest in risk and return relations in the strategic management literature. We do not examine this literature here because we have elsewhere reviewed it in detail 1 and because, for the most part, these studies have been confined to ex post data. Discussions of the strategies which subjects used to direct their ex ante evaluations of risks and returns have either been omitted or else have been only indirectly inferred from ex post data. In addition, with few exceptions, this literature does not attempt to ascertain the meanings that might have been assigned by subjects to terms like "risk" and/or the "returns" with which they have been concerned. Even fewer of these studies have attempted to ascertain how the subjects implemented their definitions en of prospective strategies. Thus, tius literature may route to arriving at evaluations best be regarded as bearing only indirect relations to the present study which is concerned not only with the meanings assigned to terms like "risk" and "return" but also with how these terms are used in arriving at risk and return evaluations of proposed strategies as well as how they are measured and used, on an ex ante basis en route to seeing how these evaluations match with ex post performance. In a sense, one part of this study--i. e.

Download or read book Three Essays on the Economics of Decision Making Under Risk written by Andreas Markoulakis and published by . This book was released on 2019 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Risk Decision and Rationality written by Bertrand Munier and published by Springer Science & Business Media. This book was released on 2012-12-06 with total page 694 pages. Available in PDF, EPUB and Kindle. Book excerpt: Decision Theory has considerably developed in the late 1970's and the 1980's. The evolution has been so fast and far-r2aching that it has become increasingly difficult to keep track of the new state of the art. After a decade of new contributions, there was a need for an overview' of the field. This book is intended to fill the gap. The reader will find here thirty~nine selected papers which were given at FUR-III, the third international confe rence on the Foundations and applications of Utility, Risk and decision theories, held in Aix-en-Provence in June 1986. An introductory chapter will provide an overview of the main questions raised on the subject since the 17th Century and more particularly so in the last thirty years, as well as some elementary information on the experimental and theoretical results obtained. It is thus hoped that any reader with some basic background in either Economics, Hanagement or Operations Research will be able to read profitably the thirty-nine other chapters. Psychologists, Sociologists, Social Philosophers and other specialists of the social sciences will also read this book with interest, as will high-level practitioners of decision~making and advanced students in one of the abovementioned fields. An expository survey of this volume will be found at the end of the introductory chapter, so that any of the seven parts of the book can be put by the reader in due perspective.

Download or read book Market and Professional Decision making Under Risk and Uncertainty written by Erick Davidson and published by . This book was released on 2007 with total page 107 pages. Available in PDF, EPUB and Kindle. Book excerpt: Abstract: This dissertation explores decision making under risk and uncertainty by professionals and markets composed of professionals. Both essays use empirical data from some of the most competitive economic environments imaginable. The first essay looks at market prices resulting from the sum of both professional and lay choices while the second analyzes the individual choices of professional gamblers. Both essays propose a theoretical framework to not just positively identify what professionals do, but also prescribe normatively what they should do. In both cases, the two are found to be different. The first essay, Market Response to Risk and Uncertainty, 2004 Hurricane Forecasts, develops a simple function to explain insurance losses from hurricanes as a function of short-term forecasts. After demonstrating the accuracy of the function in explaining 2004 insurance claims, the remainder of the essay looks at the stock market's use of these forecasts in pricing insurer and US economy risk. Despite causing billions in damages, both hurricanes and hurricane forecasts are found to have only marginal impacts on financial markets. Surprisingly, markets fail to make efficient use of hurricane forecasts in pricing both insurer and general market exposure to hurricane risk. A potential explanation for market inefficiency around hurricane information is that, like researchers, financial actors may be confounding uncertainty for unpredictability. The second essay, Know When to Hold'em, examines a specific decision within a highly popular, high-stakes version of poker. Like financial markets analyzed in the first essay, professional gamblers must make risky decisions with uncertain probabilities of success. Gamblers are found to be both overly conservative in their choices and overly confident in their abilities to predict uncertain outcomes. A simple statistical model that generalizes across situations to form a naïve probability of having the best cards, is found to be as effective in decision making as players' true expectations of winning. Additionally, a dynamic theoretical model is presented in order to show professional divergence from risk-neutral expected profit maximization in the credit constrained world of tournament poker. Interestingly the value function, derived from this model, is equivalent to an optimal stock price of a poker player.

Download or read book Experiments in Decision Organization and Exchange written by Richard Hollis Day and published by North Holland. This book was released on 1993 with total page 396 pages. Available in PDF, EPUB and Kindle. Book excerpt: The use of experimental methods in economics has grown rapidly during the last decade. The essays included in this volume, some of them pioneering contributions in their own right, are broadly representative of much of the substantial literature that now exists. The volume will therefore provide a convenient source for anyone who wishes to learn about the field; the kinds of topics that have been addressed using the experimental approach; and the methods and theoretical tools that have dominated so far. Moreover, it will prove a useful supplement for students of decision theory and even for students of Schumpeterian competition.

Download or read book Essays on Decision Theory and Economic Efficiency written by Ariane Charpin and published by . This book was released on 2019 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: This doctoral thesis focuses on two distinct themes: decision-making in situations of risk and economic efficiency. These two questions are treated in an empirical framework using unique databases. The first chapter tests the theoretical models of decision under risk on bets on horseraces to identify the theory that allows the best description of individuals' choices. This chapter shows that behavioral theories of decision under risk (cumulative prospect theory and rank-dependent utility) are better suited to explain the behavior of bettors observed in the data than the expected utility theory. The second chapter estimates the effect of a merger between two large companies in the urban transport sector in France on their costs. The results show that the merger did not result in efficiency gains for the merging parties. This result can be understood in light of the context in which the merger was conducted, in particular the reasons for the choice of the target, the perception of customers and employees of the merger, the differences in culture between the companies and the operational preparation of the merger. The third chapter examines the impact of greater discretion in tendering procedures on the selection of operators, particularly their productivity. The main result is that the procedure that potentially increases the discretion of public purchasers leads to the selection of less efficient companies than a procedure involving little or no discretion. Further analyzes suggest that the result is due to the effect of greater discretion at the screening stage.

Download or read book Decision Making Under Uncertainty written by David E. Bell and published by Thomson South-Western. This book was released on 1995 with total page 228 pages. Available in PDF, EPUB and Kindle. Book excerpt: These authors draw on nearly 50 years of combined teaching and consulting experience to give readers a straightforward yet systematic approach for making estimates about the likelihood and consequences of future events -- and then using those assessments to arrive at sound decisions. The book's real-world cases, supplemented with expository text and spreadsheets, help readers master such techniques as decision trees and simulation, such concepts as probability, the value of information, and strategic gaming; and such applications as inventory stocking problems, bidding situations, and negotiating.

Download or read book Essays on Decision Making Under Uncertainty written by Santiago Ignacio Sautua and published by . This book was released on 2015 with total page 234 pages. Available in PDF, EPUB and Kindle. Book excerpt: This dissertation consists of three chapters about decision making under uncertainty. Chapter 1: "Testing between Models of Smoking Risk Perceptions" Research in social and health psychology reports that smokers systematically underestimate the personal smoking risk. I build a model that captures potential determinants of smoking risk perceptions to investigate how smoking may cause an underestimation of the risk. The model is based on the premise that smokers have an incentive to be optimistic: because quitting may be hard, they find it reassuring to think that smoking is not so risky. Drawing upon the theoretical framework, I suggest two empirical tests of the model--one using survey data and another based on a laboratory experiment. Chapter 2: "Does Uncertainty Cause Inertia in Decision Making? An Experimental Study of the Role of Regret Aversion and Indecisiveness" Previous research has shown that in many situations there is clear inertia in individual decision making--that is, a tendency for decision makers to choose a status quo option. The status quo option may be the result of a previous choice, or may simply be the option designated as the "default." While inertia may simply reflect the fact that individuals view the status quo option as optimal, there are other factors that may explain this observed behavior. I conduct a laboratory experiment to thoroughly investigate two potential determinants of inertia in uncertain environments: (i) regret aversion and (ii) indecisiveness. A decision maker may experience regret when the outcome of a choice compares unfavorably to the outcome that would have occurred had she made a different choice. Alternatively, a decision maker may be indecisive among the options if she does not know the probability distributions over the relevant outcomes. I use a between-subjects design, with varying conditions, to identify the effects of regret aversion and indecisiveness on choice behavior. In each condition, participants choose between two simple real gambles, one of which is assigned to be the status quo. I find that inertia is quite large and that both mechanisms are equally important. Chapter 3: "Risk, Ambiguity, and Diversification" Attitudes toward risk influence the decision to diversify among uncertain options. Yet, because in most situations the probability distributions over outcomes are unknown, attitudes toward ambiguity may also play an important role. In a simple laboratory experiment, I investigate the effect of ambiguity on the decision to diversify. Participants have the opportunity to diversify between gambles; in one condition, all gambles are risky, whereas in the other all gambles are ambiguous. I find that diversification is more prevalent and more persistent under ambiguity than under risk. Moreover, excess diversification under ambiguity is driven by participants who stick with a status quo gamble when diversification is not feasible. This behavioral pattern cannot be accommodated by major theories of choice under ambiguity.

Download or read book Essays on Decision Making Under Uncertainty written by Masaki Miyashita and published by . This book was released on 2023 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: This dissertation studies several economic questions related to decision making under uncertainty. In the first chapter, I consider the question of to what extent an external observer can infer the underlying information structure by observing an equilibrium action distribution in an incomplete information game. I investigate this issue in a general linear-quadratic-Gaussian framework. A simple class of canonical information structures is offered and proves rich enough to rationalize any possible equilibrium action distribution that can arise under an arbitrary information structure. I show that the class is parsimonious in the sense that the relevant parameters can be uniquely pinned down by an observed equilibrium outcome, up to some qualifications. This implies, for example, that the accuracy of each agent's signal about the state is identified, as measured by how much observing the signal reduces the state variance. Moreover, I show that a canonical information structure characterizes the lower bound on the amount by which each agent's signal can reduce the state variance, across all observationally equivalent information structures. The lower bound is tight, for example, when the actual information structure is uni-dimensional, or when there are no strategic interactions among agents, but in general, there is a gap since agents' strategic motives confound their private information about fundamental and strategic uncertainty.The second chapter is based on my joint work with Federico Echenique, Yuta Nakamura, Luciano Pomatto, and Jamie Vinson. We propose a model of incomplete preferences, termed twofold multiprior preferences, in which an act f is ranked above an act g only when f provides higher utility in a worst-case scenario than what g provides in a best-case scenario. The model explains the experimental phenomenon, called failures of contingent reasoning, captured through a weakening of the state-by-state monotonicity (or dominance) axiom. Our model gives rise to rich comparative statics results, which demonstrate that the two important decision criteria in the literature--subjective expected utility representation and obvious dominance--can be encapsulated as the respective extreme cases of our model. We present an application to second-price auctions and illustrate that our model can explain a wide array of anomalistic bidding behaviors caused by failures of contingent reasoning, yet it can provide sharper predictions than obvious dominance.The third chapter, coauthored with Carlo Cusumano, extends the analysis of the second chapter by studying a general class of twofold preferences that compare different acts based on two possibly different utility functions. We find that the twofold preferences are useful for analyzing economic problems for at least two reasons. From a behavioral perspective, it enables theoretical models to account for the indecisiveness of a decision maker's choice in a way depending on the scale of odds. From a modeling perspective, the twofold approach can be a unified framework for modeling various incomplete preferences that differ in additional independence-type axioms to be imposed. Our series of axiomatization results provide the characterizations of the incomplete counterparts of existing complete preferences in the literature.

Download or read book Experiments in decision making under Risk written by Michał Wiktor Krawczyk and published by Rozenberg Publishers. This book was released on 2009 with total page 171 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Decision Making under Uncertainty written by R.W. Scholz and published by Elsevier. This book was released on 1983-11-01 with total page 457 pages. Available in PDF, EPUB and Kindle. Book excerpt: This volume contains the revised papers of an international symposium on research on fallacies, biases, and the development of decision behavior under uncertainty. The papers are organized in five main sections.The Introduction outlines the conceptual framework and how three of the sections - Cognitive Decision Research, Social Interaction, and Development and Epistemology - are interrelated and also how new fields, such as research into developmental questions, can be productively integrated.In the fifth section Comments are collected, which evaluate the impact of the contributions on decision research itself, and also on cognitive psychology, social psychology, economic theory, ant the discipline of mathematics education.