Bounded cardinal utility theory (BCUT), built on the seminal work of Van Praag (1968), is based on three axioms. • The leaning-S-shaped utility function reflects the individual’s experiences of fulfilment of a need – deprivation (increasing marginal utility (MU)), subsistence (a point of...

Motivated by the extensive evidence about the relevance of status quo bias both in experiments and in real markets, we study this phenomenon from a decision-theoretic prospective, focusing on the case of preferences under uncertainty. We develop an axiomatic framework that takes as a primitive...

The focus of this study is on black markets which provide an important segment of the parallel economy. These markets operate in disequilibrium,search and information costs become very important.Trafficking in drugs taken as case, to explore both theoretically and empirically. The problem,...

We provide conditions under which an incomplete strongly independent preorder on a convex set X can be represented by a set of mixture preserving real-valued functions. We allow X to be infinite dimensional. The main continuity condition we focus on is mixture continuity. This is sufficient for...

The paper is intended to be a synthesis of the general approaches on economic risk and economic decisions under risk. Delimitation of the risk from the uncertainty is based on Knight’s views. Basically decisions are analyzed in a conventional manner by using the expected utility hypothesis....

Numerous experiments demonstrate attitude polarization. For instance, Lord, Ross & Lepper presented subjects with the same mixed evidence on the deterrent effect of the death penalty. Both believers and skeptics of its deterrent effect became more convinced of their views; that is, the...

This research examines how the reliance on emotional feelings as a heuristic influences the proposal of offers in negotiations. Results from three experiments based on the classic ultimatum game show that, compared to proposers who do not rely on their feelings, proposers who rely on their...

A common explanation for biases in judgment and choice has been to postulate two separate processes in the brain: a “System 1” that generates judgments automatically, but using only a subset of the information available, and a “System 2” that uses the entire information set, but is only...

When the increase in income reduces the time of search and increases prices of purchases, the increase in price can be presented as the increase in the willingness to pay for insurance. The optimal consumer decision represents the trade-off between the propensity to search for proficient...

When income growth under price dispersion reduces the time of search and raises prices of purchases, the increase in purchase price can be presented as the increase in the willingness to pay for insurance or the willingness to pay for consumer credit. The optimal consumer decision represents the...