Peters / Abdellaoui Advances in Decision Making Under Risk and Uncertainty

1. Auflage 2008
ISBN: 978-3-540-68437-4
Verlag: Springer-Verlag
Format: PDF
Kopierschutz: Adobe DRM (»Systemvoraussetzungen)

E-Book, Englisch, 242 Seiten

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.

Autoren/Hrsg.

Peters, H.

Abdellaoui, Mohammed

Inhaltsverzeichnis

1;Preface;5
2;Contents;9
3;Contributors;11
4;Part I;14
5;Uncertainty and Information Modeling;14
5.1;Revealed Ambiguity and Its Consequences: Updating;15
5.1.1;1 Introduction;15
5.1.2;2 Preliminaries ;17
5.1.3;3 Some Derived Concepts;20
5.1.4;4 Revealed Ambiguity and Updating;22
5.1.5;Appendix;25
5.1.6;Notes;30
5.1.7;References;30
5.2;Dynamic Decision Making When Risk Perception Depends on Past Experience;31
5.2.1;1 Introduction;31
5.2.2;2 Behavior at a Point of Time;33
5.2.3;3 Dynamic Choice;36
5.2.4;4 An Insurance Demand Illustration;39
5.2.5;5 Concluding Remarks;43
5.2.6;References;44
5.3;Representation of Conditional Preferences Under Uncertainty;45
5.3.1;1 Introduction;45
5.3.2;2 Axioms;48
5.3.3;3 Representation Results;51
5.3.4;4 Concluding Remark;54
5.3.5;Notes;58
5.3.6;References;58
5.4;Subjective Information in Decision Making and Communication;60
5.4.1;1 Introduction;60
5.4.2;2 Perception ;61
5.4.3;3 Communication ;67
5.4.4;4 Conclusion;72
5.4.5;Notes;72
5.4.6;References;73
6;Risk Modeling;74
6.1;Sensitivity Analysis in Decision Making: A Consistent Approach;75
6.1.1;1 Introduction;75
6.1.2;2 Sensitivity Analysis for Decision Analysis Models with Given Probabilities ;78
6.1.3;3 Sensitivity Analysis with Uncertainty: The Expected Value Problem;88
6.1.4;4 Sensitivity Analysis with Uncertainty: The State of Belief Problem;90
6.1.5;5 Conclusions;93
6.1.6;Notes;94
6.1.7;Appendix 1: Proofs;95
6.1.8;References;98
6.2;Alternation Bias and the Parameterization of Cumulative Prospect Theory;100
6.2.1;1 Introduction;100
6.2.2;2 Local Representativeness Effect;102
6.2.3;3 Application to the St. Petersburg Gamble;102
6.2.4;4 Conclusion;108
6.2.5;Appendix 1: Mathematical Appendix;110
6.2.6;Notes;114
6.2.7;References;114
6.3;Proposing a Normative Basis for the S-Shaped Value Function;117
6.3.1;1 Introduction;117
6.3.2;2 An Evolutionary Rationale for the S-Shaped Value Function;118
6.3.3;3 The Impact of Prospects and Behavior on Fitness;119
6.3.4;4 Deriving the S-Shaped Value/Utility Function;120
6.3.5;5 Discussion;125
6.3.6;Notes;126
6.3.7;References;126
7;Experimental Individual Decision Making;127
7.1;Individual Choice from a Convex Lottery Set: Experimental Evidence;128
7.1.1;1 Introduction;128
7.1.2;2 Experimental Design ;129
7.1.3;3 Theoretical Considerations;130
7.1.4;4 Original and High Stake Experiment ;132
7.1.5;5 Transparency Experiment;136
7.1.6;6 Summary;137
7.1.7;Notes;138
7.1.8;References;139
7.2;Temptations and Dynamic Consistency;143
7.2.1;1 Introduction;143
7.2.2;2 The Theory Tested;144
7.2.3;3 The Experimental Design;145
7.2.4;4 The Data Analysis;147
7.2.5;5 Conclusions;149
7.2.6;Appendix 1The Consent Form, the Instructions and the DebriefingQuestionnaire and Statement;150
7.2.7;I Instructions for the Experiment;151
7.2.8;II Instructions for the Experiment;152
7.2.9;Appendix 2 The Implications of Alternative Mappings from the Indices to the Weightings;155
7.2.10;References;156
7.3;Monty Hall’s Three Doors for Dummies;157
7.3.1;1 Introduction;157
7.3.2;2 The Problem;158
7.3.3;3 The New Experimental Design;159
7.3.4;4 The Experiment;160
7.3.5;5 Discussion;165
7.3.6;6 Conclusion and a Final Remark;166
7.3.7;Notes;167
7.3.8;References;167
7.4;Overconfidence in Predictions as an Effect of Desirability Bias;169
7.4.1;1 Introduction;169
7.4.2;2 Study 1 ;171
7.4.3;3 Study;177
7.4.4;4 Summary and Conclusions;184
7.4.5;References;185
8;Experimental Interactive Decision Making;187
8.1;Granny Versus Game Theorist: Ambiguity in Experimental Games;188
8.1.1;1 Introduction;188
8.1.2;2 Ambiguity in Strategic Games;189
8.1.3;3 Design;193
8.1.4;4 Hypotheses and Results;195
8.1.5;5 Concluding Discussion;204
8.1.6;Appendix 1: Example of Instructions: Treatment gt (Translation);205
8.1.7;Notes;207
8.1.8;References;208
8.2;Guessing Games and People Behaviours: What Can We Learn?;210
8.2.1;1 Introduction;210
8.2.2;2 A Generalisation of the INBR Strategy to a Game with Interior Equilibria;212
8.2.3;3 Aim and Setting of the Experiment;214
8.2.4;4 Results and Interpretation ;215
8.2.5;5 Conclusions;219
8.2.6;Notes;221
8.2.7;References;222
8.3;The Determinants of Individual Behaviour in Network Formation: Some Experimental Evidence;223
8.3.1;1 Introduction;223
8.3.2;2 The Experimental Design ;225
8.3.3;3 Results;229
8.3.4;4 Conclusions;241
8.3.5;Appendix 1: Instructions (English Translation);241
8.3.6;Notes;244
8.3.7;References;245