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In confidence theory, the decision maker relies on statistical regularities from the economic environment to adopt prior beliefs about the probabilities stated on a lottery. Following the confidence principle, by which the weight of the prior in Bayesian inference is proportional to the...
Persistent link: https://www.econbiz.de/10013061467
Quantum decision theory (QDT) is a recently developed theory of decision making based on the mathematics of Hilbert spaces, a framework known in physics for its application to quantum mechanics. This framework formalizes the concept of uncertainty and other effects that are particularly manifest...
Persistent link: https://www.econbiz.de/10011514496
We present the first calibration of quantum decision theory (QDT) to an empirical data set. The data comprise 91 choices between two lotteries (two "prospects") presented in 91 random pairs made by 142 subjects offered at two separated times. First, we quantitatively account for the fraction of...
Persistent link: https://www.econbiz.de/10011516615
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
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
This paper extends decision making under risk and uncertainty to group theory via representations of invariant behavioural space for prospect theory. First, we predict that canonical specifications for value functions, probability weighting functions, and stochastic choice maps are homomorphic....
Persistent link: https://www.econbiz.de/10013096459
Economists often estimate economic models on data and use the point estimates as a stand-in for the truth when studying the model’s implications for optimal decision-making. This practice ignores model ambiguity, exposes the decision problem to misspecification, and ultimately leads to...
Persistent link: https://www.econbiz.de/10014487318
Persistent link: https://www.econbiz.de/10009558197
Chapter 1. Multicriteria Decision Methods for RRM Models -- Chapter 2. Comparing Cardinal and Ordinal Ranking in MCDM Methods -- Chapter 3. Evaluating Multi-Criteria Decisions Under Conditions of Strong Uncertainty -- Chapter 4. A Framework for Building Multicriteria Decision Models with regard...
Persistent link: https://www.econbiz.de/10013270891
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