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Bayesian learning and expectations formation : anything goes
Albert, Max - 1996
normative theory as well. -- Bayesianism ; Bayesian learning ; decision theory ; expectations ; learning ; rational expectations …The paper proves that the Bayesian approach to learning and expectations formation implies no propositions that could … observations, and the assumption of Bayesian rationality. Since no betting strategy is irrational, Bayesianism is useless as a …
Persistent link: https://www.econbiz.de/10009499955
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A new application for the goal programming : the target decision rule for uncertain problems
Gaspars-Wieloch, Helena - In: Journal of risk and financial management : JRFM 13 (2020) 11/280, pp. 1-14
The goal programming (GP) is a well-known approach applied to multi-criteria decision making (M-DM). It has been used in many domains and the literature offers diverse extensions of this procedure. On the other hand, so far, some evident analogies between M-DM under certainty and scenario-based...
Persistent link: https://www.econbiz.de/10012388744
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The standard model of rational risky decision-making
Falahati, Kazem - In: Journal of risk and financial management : JRFM 14 (2021) 4, pp. 1-22
Expected utility theory (EUT) is currently the standard framework which formally defines rational decision-making under risky conditions. EUT uses a theoretical device called von Neumann-Morgenstern utility function, where concepts of function and random variable are employed in their...
Persistent link: https://www.econbiz.de/10012520657
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Rational allocation of attention in decision-making
Schmitt, Stefanie Yvonne - 2016 - This version: July 29, 2016
This paper proposes a model of attention allocation in decision-making. Attention has various definitions across the literature. Here, I understand attention as selecting information for costly processing. The paper investigates how an agent rationally allocates attention. The resulting...
Persistent link: https://www.econbiz.de/10011514816
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Limited attention in case-based belief formations
Bleile, Jörg - 2014
An agent wants to derive her belief over outcomes based on past observations collected in her database (memory). There is well establish evidence in the psychology and marketing literature that agents consistently fail (or choose not) to process all available information. An agent might be...
Persistent link: https://www.econbiz.de/10010403098
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Decision Making with Rational Inattention
Mihm, Maximilian; Ozbek, Kemal - 2012
Attention scarcity is a limitation on the ability to incorporate information into actions with state-contingent consequences. In a menu choice setting, we study an axiomatic model of decision making with scarce attention. A decision maker satisfying our axioms acts as if she chooses a joint...
Persistent link: https://www.econbiz.de/10014167342
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Social anchor effects in decision-making under ambiguity
Lahno, Amrei M. - 2014
dynamics considerably differ between gain and loss domains. For gains, learning to be comparably ambiguity averse increases the …
Persistent link: https://www.econbiz.de/10010364762
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Does Everyone Use Probabilities? Intuitive and Rational Decisions About Stockholding
Binswanger, Johannes - 2013
We investigate the relationship between subjective probabilities of future stock market returns and decisions about stockholding. Specifically, we examine whether acting upon subjective probabilities is confined to individuals with high cognitive skills. We explore this question using data from...
Persistent link: https://www.econbiz.de/10013085047
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Overcoming the Knowledge Problem in Behavioral Law and Economics : Uncertainty, Decision Theory, and Autonomy
Hacker, Philipp - 2017
knowledge problem, thereby ensuring a rational treatment of the question of bounded rationality. The paper thus essentially … empirically unresolved uncertainty legal rules should presumptively assume the significant presence of bounded rationality among …
Persistent link: https://www.econbiz.de/10012971399
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Are decision errors explaining hyperbolic discounting and nonlinear probability weighting?
Holden, Stein Terje; Tione, Sarah; Tilahun, Mesfin; … - 2024
We study risky inter-temporal choice in a large random student sample (n=721) and a large rural sample (n=835) in Malawi. All respondents were exposed to the same 20 Multiple Choice Lists with a rapid elicitation method that facilitated the identification of near-future Certainty Equivalents of...
Persistent link: https://www.econbiz.de/10014581476