scholarly journals INTRODUCTION TO THE SPECIAL ISSUE OF ECONOMICS AND PHILOSOPHY ON AMBIGUITY AVERSION

2009 ◽  
Vol 25 (3) ◽  
pp. 247-248 ◽  
Author(s):  
Giacomo Bonanno ◽  
Martin van Hees ◽  
Christian List ◽  
Bertil Tungodden
Keyword(s):  
Decision Making ◽  
Expected Utility ◽  
Ambiguity Aversion ◽  
Point Of View ◽  
Special Issue ◽  
Von Neumann ◽  
Descriptive Theory ◽  
Sure Thing Principle ◽  
New Literature ◽  
Theoretical Side

The paradigm for modelling decision-making under uncertainty has undoubtedly been the theory of Expected Utility, which was first developed by von Neumann and Morgenstern (1944) and later extended by Savage (1954) to the case of subjective uncertainty. The inadequacy of the theory of Subjective Expected Utility (SEU) as a descriptive theory was soon pointed out in experiments, most famously by Allais (1953) and Ellsberg (1961). The observed departures from SEU noticed by Allais and Ellsberg became known as “paradoxes”. The Ellsberg paradox gave rise, several years later, to a new literature on decision-making under ambiguity. The theoretical side of this literature was pioneered by Schmeidler (1989). This literature views the departures from SEU in situations similar to those discussed by Ellsberg as rational responses to ambiguity. The rationality is “recovered” by relaxing Savage's Sure-Thing principle and adding an ambiguity-aversion postulate. Thus the ambiguity-aversion literature takes a normative point of view and does consider Ellsberg-type choices as behavioural “anomalies”.

The Expected Utility Theory and Measurement Theory of von Neumann and Morgenstern, 1944–1947

2018 ◽  
pp. 147-162 ◽  
Author(s):  
Ivan Moscati
Keyword(s):  
Decision Making ◽  
Utility Function ◽  
Expected Utility ◽  
Utility Theory ◽  
Theory Of Measurement ◽  
Measurement Theory ◽  
Expected Utility Theory ◽  
Economic Behavior ◽  
Utility Analysis ◽  
Von Neumann

Chapter 9 discusses the axiomatic version of expected utility theory (EUT), a theory of decision-making under risk, put forward by John von Neumann and Oskar Morgenstern in their book Theory of Games and Economic Behavior (1944). EUT was a changing factor in the history of utility measurement. In fact, while discussions of the measurability of utility before 1944 focused on the utility used to analyze decision-making between risk-free alternatives, after that year, discussions centered on the utility used to analyze decision-making between risky alternatives. In Theory of Games, the nature of the cardinal utility function u featured in von Neumann and Morgenstern’s EUT, and its relationship with the riskless utility function U of previous utility analysis remained ambiguous. Von Neumann and Morgenstern also put forward an axiomatic theory of measurement, which presents some similarities with Stanley Smith Stevens’s measurement theory but had no immediate impact on utility analysis.

Quantum Markov Model for Data from Shafir-Tversky Experiments in Cognitive Psychology

2009 ◽  
Vol 16 (04) ◽  
pp. 371-385 ◽  
Author(s):  
Luigi Accardi ◽  
Andrei Khrennikov ◽  
Masanori Ohya
Keyword(s):  
Cognitive Psychology ◽  
Markov Model ◽  
Detailed Balance ◽  
Quantum Probability ◽  
Point Of View ◽  
Von Neumann ◽  
Detailed Balance Condition ◽  
Psychology And Economics ◽  
Sure Thing Principle ◽  
Neumann Model

We analyze, from the point of view of quantum probability, statistical data from two interesting experiments, done by Shafir and Tversky [1, 2] in the domain of cognitive psychology. These are gambling experiments of Prisoner Dilemma type. They have important consequences for economics, especially for the justification of the Savage "Sure Thing Principle" [3] (implying that agents of the market behave rationally). Data from these experiments were astonishing, both from the viewpoint of cognitive psychology and economics and probability theory. Players behaved irrationally. Moreover, all attempts to generate these data by using classical Markov model were unsuccessful. In this note we show (by inventing a simple statistical test — generalized detailed balance condition) that these data are non-Kolmogorovian. We also show that it is neither quantum (i.e., it cannot be described by Dirac-von Neumann model). We proceed towards a quantum Markov model for these data.

scholarly journals Expected Utility Based Decision Making underZ-Information and Its Application

2015 ◽  
Vol 2015 ◽  
pp. 1-11 ◽  
Author(s):  
Rashad R. Aliev ◽  
Derar Atallah Talal Mraiziq ◽  
Oleg H. Huseynov
Keyword(s):  
Decision Making ◽  
Expected Utility ◽  
Real World ◽  
Imperfect Information ◽  
Human Perception ◽  
Relevant Information ◽  
Point Of View ◽  
General Representation ◽  
Direct Computation ◽  
Source Of Information

Real-world decision relevant information is often partially reliable. The reasons are partial reliability of the source of information, misperceptions, psychological biases, incompetence, and so forth.Z-numbers based formalization of information (Z-information) represents a natural language (NL) based value of a variable of interest in line with the related NL based reliability. What is important is thatZ-information not only is the most general representation of real-world imperfect information but also has the highest descriptive power from human perception point of view as compared to fuzzy number. In this study, we present an approach to decision making underZ-information based on direct computation overZ-numbers. This approach utilizes expected utility paradigm and is applied to a benchmark decision problem in the field of economics.

scholarly journals Normative and descriptive theories of decision making under risk

2014 ◽  
Vol 57 (4) ◽  
pp. 25-50 ◽  
Author(s):  
Kaja Damnjanovic ◽  
Ivana Jankovic
Keyword(s):  
Decision Making ◽  
Expected Utility ◽  
Utility Theory ◽  
Developmental Stages ◽  
Expected Utility Theory ◽  
Decision Making Process ◽  
Decision Making Under Risk ◽  
Von Neumann ◽  
Basic Concepts ◽  
Descriptive Theories

The approaches to the decision making process are typically either normative or descriptive. We sketch a historical development of the decision theory, starting with concept of utility that was first introduced by Daniel Bernoulli and then explaining the basic concepts of von Neumann and Morgenstern?s normative expected utility theory (including the basic axioms of rationality). Then we present the descriptively oriented prospect theory of Kahneman and Tversky as a critique of the expected utility theory. We compare these theories and conclude that their historical sequence captures the sequence of the developmental stages of the decision-making process itself. However, normative and descriptive theories are not mutually exclusive.

The Microeconomics of Choice under Risk and Uncertainty: Where Are We?

2014 ◽  
Vol 39 (1) ◽  
pp. 21-40 ◽  
Author(s):  
WDA Bryant
Keyword(s):  
Decision Making ◽  
Expected Utility ◽  
Utility Maximization ◽  
Ambiguity Aversion ◽  
Risky Choice ◽  
Choice Situation ◽  
Risk And Uncertainty ◽  
Business Decision ◽  
Economic Agents ◽  
The Face

Financial decision-making is not straightforward, in part, because such decisions generally involve comparing financial assets the payoffs from which are subject to risk and uncertainty. Given that situation, two questions naturally arise: How do economic agents go about the business of making choices in the face of risk and uncertainty? And, how should economic agents make choices in the face of risk and uncertainty? This paper concentrates on the first of these questions and discusses some of the main attempts made by economic theory to understand how economic agents go about the business decision-making under conditions of risk and uncertainty. Theoretical possibilities considered in the context of decisions under conditions of risk include: Expected value maximization, Expected utility maximization, Rank dependent utility maximization, Prospect theory, and the Topology of fear approach to decision-making in the face of catastrophic risk. This paper also considers empirical tests of these theoretical possibilities and some of the anomalies and responses thrown up by those tests such as: Allais Paradox, Discovered Preference Hypothesis, and the choice behaviour of CEOs when faced with risk. The paper concludes with a brief excursion into choice under uncertainty where, unlike in risky choice situation, the existence of objective probabilities over states of the world cannot be relied on. In that context, the author briefly canvases the Subjective Expected Utility approach — which is unable in general to account for ambiguity aversion — Choquet utility, Wald's Multiple Priors, and the Case Based approach This paper highlights the fact that the rich and fascinating field of decision-making under risk and uncertainty is characterized by a constant interplay between theoretical conjecture, empirical testing, and theoretical refinement. Such interplay is mirrored by this paper and contributions in the Colloquium Section of this Issue, where the thoughts of practitioners and academics interact.

scholarly journals Weak* Axiom of Independence and the Non-Expected Utility Theory

2012 ◽  
Vol 4 (1) ◽  
pp. 67-75
Author(s):  
Tapan Biswas
Keyword(s):  
Expected Utility ◽  
Utility Theory ◽  
Expected Utility Theory ◽  
Point Of View ◽  
Independence Axiom ◽  
Weak Version ◽  
Von Neumann ◽  
The Mean ◽  
Mean Variance ◽  
Weak Axiom

The axiomatic foundation of the expected utility theory (which states that given a set of uncertain prospects individuals pick up the prospect which yields the highest expected utility) was first laid down by Von Neumann and Morgenstern (1947). This axiom has come under severe criticisms in recent years. A large number of experiments have shown that in making decisions involving uncertain prospects people frequently violate the independence axiom. In this paper we shall consider the problem of choice under uncertainty from a wider point of view and we shall examine the nature of the restriction imposed by the axiom of independence. We shall use the mean-variance utility function to prove our point. Then we shall consider a weak version of the independence axiom namely the weak* axiom of independence. This is the point of departure from the expected utility theory to the realm of the non-expected utility theory. The weak* axiom allows aversion to pure uncertainty and, in the context of the mean-variance utility theory, it is compatible with utility being an increasing function of expected returns at all levels.

Medical Diagnosis from a Clinician’s Point of View

1978 ◽  
Vol 17 (01) ◽  
pp. 28-35
Author(s):  
F. T. De Dombal
Keyword(s):  
Decision Making ◽  
Data Analysis ◽  
Computer Science ◽  
Medical Diagnosis ◽  
Information Science ◽  
Point Of View ◽  
Joint Research ◽  
The World

This paper discusses medical diagnosis from the clinicians point of view. The aim of the paper is to identify areas where computer science and information science may be of help to the practising clinician. Collection of data, analysis, and decision-making are discussed in turn. Finally, some specific recommendations are made for further joint research on the basis of experience around the world to date.

scholarly journals Healthcare Data for Achieving a More Personalized Treatment of Chronic Kidney Disease

Biomedicines ◽  
2021 ◽  
Vol 9 (5) ◽  
pp. 488
Author(s):  
Francisco Herrera-Gómez ◽  
F. Javier Álvarez
Keyword(s):  
Chronic Kidney Disease ◽  
Decision Making ◽  
Kidney Disease ◽  
Prognostic Markers ◽  
Observational Evidence ◽  
Personalized Treatment ◽  
Special Issue ◽  
Healthcare Data ◽  
Clinical Endpoints ◽  
Risk Patients

The current concept of healthcare incites a more personalized treatment of diseases. To this aim, biomarkers are needed to improve decision-making facing chronic kidney disease (CKD) patients. Prognostic markers provided by real-world (observational) evidence are proposed in this Special Issue entitled “Biomarkers in Chronic Kidney Disease”, with the intention to identify high-risk patients. These markers do not target measurable parameters in patients but clinical endpoints that may be in turn transformed to benefits under the effect of future interventions.

scholarly journals Promoting Interpersonal Relationships through Elbow Tag, a Traditional Sporting Game. A Multidimensional Approach

2021 ◽  
Vol 13 (14) ◽  
pp. 7887
Author(s):  
Verónica Muñoz-Arroyave ◽  
Miguel Pic ◽  
Rafael Luchoro-Parrilla ◽  
Jorge Serna ◽  
Cristòfol Salas-Santandreu ◽  
...  
Keyword(s):  
Decision Making ◽  
Social Interactions ◽  
Interpersonal Relationships ◽  
Predictive Power ◽  
Ad Hoc ◽  
Scientific Evidence ◽  
Point Of View ◽  
Registration System ◽  
Motor Behaviors ◽  
Quasi Experimental

The aim of this research was to study from a multidimensional point of view (decisional, relational and energetic) the interpersonal relationships established by girls and boys in the traditional sport game of Elbow Tag. Scientific evidence has shown that Traditional Sport Games (TSG) trigger different effects on male and female genders in relation to emotional experiences, decision-making, conflicts and motor relationships. Despite the fact that these dimensions are intertwined, there are hardly any studies that interpret motor behaviors holistically, i.e., taking a multidimensional (360°) view of these dimensions. For this study, a quasi-experimental design was used and a type III design was applied, inspired by the observational methodology N/P/M. A total of 147 university students participated (M = 19.6, SD = 2.3): 47 girls (31.97%) and 100 boys (68.02%). A mixed ‘ad hoc’ registration system was designed with acceptable margins of data quality. Cross-tabulations, classification trees and T-patterns analysis were applied. The results indicated that social interactions between girls and boys in a mixed group were unequal. This difference was mainly due to decision-making (sub-role variable), which has much greater predictive power than the energetic variables (MV and steps).

Expanding Foresight Evaluation Capacity

2019 ◽  
Vol 11 (4) ◽  
pp. 287-291
Author(s):  
Annette L. Gardner ◽  
Peter Bishop
Keyword(s):  
Decision Making ◽  
Professional Practice ◽  
Health Sector ◽  
Systematic Evaluation ◽  
Special Issue ◽  
Scenario Development ◽  
Evaluation Capacity ◽  
The Subject ◽  
Evaluation Approaches

The subject of evaluating foresight work has been around for almost as long as the professional practice itself has, but the field has done little to move closer to a systematic evaluation of its work. This special issue marks the second collection of articles on that project after a special issue of Futures in 2012 (Van Der Duin and Van Der Martin 2012). This issue takes a three-part approach: Part 1: evaluation of foresight in general and evaluation approaches and methods that can support designing an appropriate evaluation; Part 2: evaluation of foresight work in organizations and its impact on long-term thinking and decision-making; and Part 3: evaluation of specific foresight activities—an undergraduate learner foresight experience and a health sector scenario development exercise. The foreword ends with a reflection on the continuing issue of foresight and evaluation.

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