An investment bubble is a period of excessive, and predictably unpro table, investment (DeMarzo, Kaniel and Kremer, 2007, p.737). Such bubbles most often accompany the arrival of some new technology, such as the tech stock boom and bust of the late 1990 s and early 2000 s. We provide a rational...

Experimental evidence suggests that choice behaviour has a stochastic element. Much of this evidence is based on studying choices between lotteries ñchoice under risk. Binary choice probabilities admit a strong utility representation (SUR) if there is a utility function such that the...

This paper studies the essential elements (Puppe, 1996) associated with binary relations over opportunity sets. We restrict attention to binary relations which are re?flexive and transitive (pre-orders) and which further satisfy a monotonicity and desirability condition. These are called...

Scalability refers to the existence of a utility scale on alternatives, with respect to which binary choice probabilities are suitably monotone. This is a fundamental concept in psychophysical theory (Falmagne, 1985). We introduce a new notion of scalability which we call strict scalability, and...

Experimental evidence suggests that the process of choosing between lotteries (risky prospects) is stochastic and is better described through choice probabilities than preference relations. Binary choice probabilities admit a Fechner representation if there exists a utility function u such that...

We present new axiomatisations for various models of binary stochastic choice that may be characterised as "expected utility maximisation with noise". These include axiomatisations of strictly (Ryan 2018a) and simply (Tversky and Russo, 1969) scalable models, plus strict (Ryan, 2015) and strong...

Aguiar's (2017) random categorisation rule (RCR) describes random choice behaviour as the maximisation of a linear preference order over the intersection of a random consideration set with the set of available options. A key axiom in Aguiar's (2017) characterisation of the RCR is an acyclicity...

The Condorcet Jury Theorem formalises the "wisdom of crowds": binary decisions made by majority vote are asymptotically correct as the number of voters tends to infinity. This classical result assumes like-minded, expected utility maximising voters who all share a common prior belief about the...

Ryan (2017) introduces a condition on binary stochastic choice between lotteries which we call Weak Transparent Domniance (WTP). Consider a binary choice set containing two different mixtures over a "best" and "worst" possible prize, so that one option transparently dominates the other. The WTD...