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Partial Prescriptions for Decisions with Partial Knowledge
Manski, Charles F. - 2008
can be represented as maximization of expected utility. However, our agent is not concerned the consistency of his … dominance should be considered rational. Expected utility maximization respects dominance, but it has no special status from the …
Persistent link: https://www.econbiz.de/10012769876
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Uncertainty Equivalents : Testing the Limits of the Independence Axiom
Andreoni, James - 2011
There is convincing experimental evidence that Expected Utility fails, but when does it fail, how severely, and for … Expected Utility performs well away from certainty, but fails near certainty for about 40% of subjects. Comparing non …-Expected Utility theories, we strongly reject Prospect Theory probability weighting, we support disappointment aversion if amended to …
Persistent link: https://www.econbiz.de/10013121044
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Risk Preferences are Not Time Preferences : Discounted Expected Utility with a Disproportionate Preference for Certainty
Andreoni, James - 2010
Risk and time are intertwined. The present is known while the future is inherently risky. Discounted expected utility … robust violations of discounted expected utility, inconsistent with both prospect theory probability weighting and models …
Persistent link: https://www.econbiz.de/10013138320
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Goals and Plans in Protective Decision Making
Krantz, David - 2012
decisions. Neither expected utility theory nor prospect theory can explain these anomalies satisfactorily. We propose a … constructed-choice model for general decision making. The model departs from utility theory and prospect theory in its treatment …
Persistent link: https://www.econbiz.de/10012755476
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Comparing the Point Predictions and Subjective Probability Distributions of Professional Forecasters
Engelberg, Joseph - 2010
We use data from the Survey of Professional Forecasters to compare point forecasts of GDP growth and inflation with the subjective probability distributions held by forecasters. We find that SPF forecasters summarize their underlying distributions in different ways and that their summaries tend...
Persistent link: https://www.econbiz.de/10012761765
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Rational Inattention When Decisions Take Time
Hebert, Benjamin - 2019
Decisions take time, and the time taken to reach a decision is likely to be informative about the cost of more precise judgments. We formalize this insight in the context of a dynamic rational inattention (RI) model. Under standard conditions on the flow cost of information in our discrete-time...
Persistent link: https://www.econbiz.de/10012860435
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Revising Commitments : Field Evidence on the Adjustment of Prior Choices
Giné, Xavier - 2012
The very poor in developing countries often make intertemporal choices that seem at odds with their individual self-interest. There are many possible reasons why. We investigate several of these reasons with a lab-in-the-field experiment in rural Malawi involving large stakes. We make two...
Persistent link: https://www.econbiz.de/10013106639
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What Comes to Mind
Gennaioli, Nicola - 2010
We present a model of judgment under uncertainty, in which an agent combines data received from the external world with information retrieved from memory to evaluate a hypothesis. We focus on what comes to mind immediately, as the agent makes quick, intuitive evaluations. Because the automatic...
Persistent link: https://www.econbiz.de/10013152441
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When Consensus Choice Dominates Individualism : Jensen's Inequality and Collective Decisions Under Uncertainty
Manski, Charles F. - 2009
Research on collective provision of private goods has focused on distributional considerations. This paper studies a class of problems of decision under uncertainty in which the argument for collective choice emerges from the mathematics of aggregating individual payoffs. Consider decision...
Persistent link: https://www.econbiz.de/10013157910
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Rational Discounting for Regulatory Analysis
Viscusi, W. Kip - 2012
This article examines the economic basis for what is termed %u201Crational discounting,%u201D which entails full recognition of policy effects over time and exponential discounting at a riskless rate of return. Policies often cannot be ranked unambiguously in terms of their present or future...
Persistent link: https://www.econbiz.de/10012755519