Showing 1 - 10 of 40
In this paper, we propose an interpretation of the Hilbert space method used in quantum theory in the context of decision making under uncertainty. For a clear comparison we will stay as close as possible to the framework of SEU suggested by Savage (1954). We will use the Ellsberg (1961) paradox...
Persistent link: https://www.econbiz.de/10011853162
This paper introduces a framework for selecting policies that maximize expected welfare under estimation uncertainty. The proposed method explicitly balances the size of the estimated welfare against the uncertainty inherent in its estimation, ensuring that chosen policies meet a reporting...
Persistent link: https://www.econbiz.de/10015423854
Using basic decision-theory, we construct a theory of agnosticism, where agnosticism is defined as choosing not to choose a religion. The theory indicates agnosticism can be supported as a rational choice if (a) adopting agnosticism provides in-life benefits relative to any religion, (b) the...
Persistent link: https://www.econbiz.de/10008671467
Turbulent environment can create crises that management has to soles in a limited time with critical decisions. Critical decisions are an attempt to apply efficient modes of cognition and action to enable the organization to cope with consequential environmental threats or take advantage of...
Persistent link: https://www.econbiz.de/10012828333
We propose a new parametrization of Quantum Decision Theory (QDT), based on Rank Dependent Utility Theory (RDU). Using experimental data made of choices between pairs of lotteries, we compare QDT with "classical" decision theories, RDU and Cumulative Prospect Theory (CPT). At the aggregate...
Persistent link: https://www.econbiz.de/10012612940
Economists often estimate a subset of their model parameters outside the model and let the decision-makers inside the model treat these point estimates as-if they are correct. This practice ignores model ambiguity, opens the door for misspecification of the decision problem, and leads to...
Persistent link: https://www.econbiz.de/10012594943
The paper offers a non-probabilistic framework for representation of uncertainty in the context of a simple linear-quadratic model of fiscal adjustment. Instead of treating model disturbances as random variables with known probability distributions, it is only assumed that they belong to some...
Persistent link: https://www.econbiz.de/10012982445
Ordering alternatives by their degree of ambiguity is a crucial element in decision-making processes in general and in asset pricing in particular. Thus far the literature has not provided an applicable measure of ambiguity allowing for such ordering. The current paper addresses this need by...
Persistent link: https://www.econbiz.de/10013113936
Interactive decision aids (IDAs) typically use concrete product feature-based approaches to interact with consumers. Recently however, interaction designs that focus on communicating abstract consumer needs have been suggested as a promising alternative. This article investigates how temporal...
Persistent link: https://www.econbiz.de/10013136781
It is natural for humans to judge the outcome of a decision under uncertainty as a percentage of an ex-post optimal performance. We propose a robust decision-making framework based on a relative performance index. It is shown that if the decision maker's preferences satisfy quasisupermodularity,...
Persistent link: https://www.econbiz.de/10013308838