Stimulated by Frank Knight's work, "Risk, Uncertainty and Profit," I present a theory of innovation based on what I term Knightian decision theory. This theory includes a concept of uncertainty aversion, a behavioral property that makes people reluctant to undertake new unevaluatable risks. This...

This paper addresses a very profound question concerning financial accounting. Is financial accounting measurement. as represented by diverse valuation rules. hodgepodge or is it logically developed? Salvary [1985. p.28. Chap. IV] advances and provides a theoretical development of the concept of...

If each member of a group assigns a certain probability to a hypothesis, what probability should the collective as a whole assign? More generally, how should individual probability functions be merged into a single collective one? I investigate this question in case that the individual...

We examine the implications of decision theory for religious choice and evangelism, under the assumption that people choose their religion. The application of decision theory leads us to a broad definition of religion and a particular definition of faith, each related to the uncertainty...

This note revisits the problem of selection bias, using a simple binomial example. It focuses on selection that is introduced by observing the data and making decisions prior to formal statistical analysis. Decision rules and interpretation of confidence measure and results must then be taken...

This paper explores the use of heuristic search algorithms for modeling human decision making. It is shown that this algorithm is consistent with many observed behavioral regularities, and may help explain deviations from rational choice. The main insight is that the heuristic function can be...

Behavior in dynamic competitive situations requires decision makers to evaluate their own as well as their competitors’ positions. This paper uses data from a realistic competitive risk taking setting, Jeopardy’s Tournament of Champions, to test whether individual players choose the...

Estimation of a quantile of the common marginal distribution in a multivariate Lomax (Pareto II) distribution with unknown location and scale parameters is considered. For quadratic loss and specified extreme quantiles, it is established that the best affine equivariant procedure is inadmissible...