This chapter reviews developments in the theory of decision making under risk and uncertainty, focusing on models that, over the last 40 years, dominated the theoretical discussions. It also surveys some implications of the departures from the “linearity in the probabilities” aspect of...

Decision theory can be used to test the logic of decision making - one may ask whether a given set of decisions can be justified by a decision-theoretic model. Indeed, in principal-agent settings, such justifications may be required - a manager of an investment fund may be asked what beliefs she...

We characterize prior-by-prior Bayesian updating using a model proposed by Gilboa, Maccheroni, Marinacci and Schmeidler (2010) that jointly considers objective and subjective rationality. These rationality concepts are subject to the Bewley unanimity rule and maxmin expected utility,...