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On rational choice and the representation of decision problems
Oliva, Paulo; Zahn, Philipp - In: Games 12 (2021) 4, pp. 1-21
In economic theory, an agent chooses from available alternatives-modeled as a set. In decisions in the field or in the lab, however, agents do not have access to the set of alternatives at once. Instead, alternatives are represented by the outside world in a structured way. Online search results...
Persistent link: https://www.econbiz.de/10012698098
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Limited attention in case-based belief formations
Bleile, Jörg - 2014
An agent wants to derive her belief over outcomes based on past observations collected in her database (memory). There is well establish evidence in the psychology and marketing literature that agents consistently fail (or choose not) to process all available information. An agent might be...
Persistent link: https://www.econbiz.de/10010403098
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Rethinking nudge : not one but three concepts
Mongin, Philippe; Cozic, Mikaël - 2017
slightly altering choice conditions (here nudge 1), they use rationality failures instrumentally (here nudge 2), and they …
Persistent link: https://www.econbiz.de/10011741579
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Rationality is not consistency
Caliari, Daniele - 2023
We challenge the standard definition of economic rationality as consistency by making use of a novel distinction … evidence raises doubts about the choice of language that equates consistency with rationality in economics. …
Persistent link: https://www.econbiz.de/10014323610
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The standard model of rational risky decision-making
Falahati, Kazem - In: Journal of risk and financial management : JRFM 14 (2021) 4, pp. 1-22
Expected utility theory (EUT) is currently the standard framework which formally defines rational decision-making under risky conditions. EUT uses a theoretical device called von Neumann-Morgenstern utility function, where concepts of function and random variable are employed in their...
Persistent link: https://www.econbiz.de/10012520657
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Heuristics and public policy : decision making under bounded rationality
Dhami, Sanjit S.; Al-Nowaihi, Ali; Sunstein, Cass R. - 2018
How do human beings make decisions when, as the evidence indicates, the assumptions of the Bayesian rationality … rationality, with particular emphasis on growing formalization of those departures, which add necessary precision. We also explore … the relationship between bounded rationality and libertarian paternalism, or nudges, and show that some recent objections …
Persistent link: https://www.econbiz.de/10011926917
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Asian Disease-type of Framing of Outcomes as an Historical Curiosity
Jullien, Dorian - Groupe de REcherche en Droit, Économie, Gestion … - 2013
This paper discusses the ways by which a certain type of behavioral deviation from expected utility theory has been handled by psychologists and economists. With respect to the historical background of decision theory in economics, it is argued that there are good reasons for more theoretical...
Persistent link: https://www.econbiz.de/10010860430
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A model of choice from lists
Rubinstein, Ariel; Salant, Yuval - In: Theoretical economics : TE ; an open access journal in … 1 (2006) 1, pp. 3-17
The standard economic choice model assumes that the decision maker chooses from <i>sets</i> of alternatives. In contrast, we analyze a choice model in which the decision maker encounters the alternatives in the form of a <i>list</i>. We present two axioms similar in nature to the classical axioms of choice...
Persistent link: https://www.econbiz.de/10011704472
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What Simon says
Heukelom, Floris - 2006
degree of rationality that is higher than which can be attained by the individual. In this realm his main preoccupation are …
Persistent link: https://www.econbiz.de/10011350370
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Axiom preferences and choice mistakes under risk
Herweg, Fabian; Hippel, Svenja; Müller, Daniel; … - 2024
We investigate whether violations of canonical axioms of choice under risk are mistakes or a manifestation of true preferences. First, we elicit axiom and gamble preferences and then allow subjects to revise their potentially conflicting preferences. Among the behavioral patterns that allow for...
Persistent link: https://www.econbiz.de/10014556632