Deontological Decision Theory and the Grounds of Subjective Permissibility

2019 ◽  
pp. 204-222
Author(s):  
Seth Lazar
Keyword(s):  
Decision Making ◽  
Decision Theory ◽  
Expected Utility ◽  
Imperfect Information ◽  
Perfect Information ◽  
Risk And Uncertainty

If we had perfect information, then we could say, for any given objectively permissible act, what makes it objectively permissible. But when we have imperfect information, when we must decide under risk and uncertainty, what then makes an act subjectively permissible or impermissible? There are two salient possibilities. The first is the “verdicts” approach. It grounds judgments of subjective permissibility in probabilistically discounted judgments of objective permissibility. The principle “minimize expected objective wrongness” takes this approach. The second is the “reasons” approach. It grounds subjective permissibility in probabilistically discounted objective reasons. “Maximize expected utility” is one example. Chapter 10 considers whether the verdicts approach or the reasons approach to grounding judgments of subjective permissibility is better suited for deontological decision-making with imperfect information. Perhaps surprisingly, the reasons approach comes out on top.

scholarly journals ECONOMICS OF RANDOMNESS: BEHAVIORAL ASPECTS OF DECISION MAKING UNDER RISK

2017 ◽  
Vol 9 (2) ◽  
pp. 7-14
Author(s):  
Alexander Krasilnikov
Keyword(s):  
Decision Making ◽  
Risk Analysis ◽  
Uncertainty Analysis ◽  
Expected Utility ◽  
Utility Theory ◽  
Expected Utility Theory ◽  
Probabilistic Methods ◽  
Risk And Uncertainty ◽  
Decision Making Under Risk ◽  
History Of

The paper discusses evolution of the concept of risk in economics. History of probabilistic methods and approaches to risk and uncertainty analysis is considered. Expected utility theory, behavioral approaches, heuristic models and methods of neuroeconomics are analyzed. Author investigates stability of neoclassical program related to risk analysis and suggests further directions of development.

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.

BEHAVIORAL DECISION MAKING WITH COMBINED STATES UNDER IMPERFECT INFORMATION

2013 ◽  
Vol 12 (03) ◽  
pp. 619-645 ◽  
Author(s):  
RAFIK A. ALIEV ◽  
WITOLD PEDRYCZ ◽  
OLEG H. HUSEYNOV
Keyword(s):  
Decision Making ◽  
Prospect Theory ◽  
Expected Utility ◽  
Imperfect Information ◽  
Wide Spectrum ◽  
Real Life ◽  
Suggested Approach ◽  
Behavioral Decision Making ◽  
Behavioral Decision ◽  
Special Cases

Behavioral decision making is an area of multidisciplinary research attracting growing interest of scientists and practitioners, economists, and business people. A wide spectrum of successful theories is present now, including Prospect theory, multiple priors models, studies on altruism, trust and fairness. However, these theories are developed for precise and complete information, whereas real information concerning a decision maker's (DM) behavior and environment is imperfect, qualitative, and, as a result, often described in natural language (NL). We suggest an approach based on modeling a DM's behavior by a set of states. Each state represents a certain principal behavior. In our approach, states of nature and DM's states constitute a single space of combined states. For formalizing relevant information described in NL, we use fuzzy set theory. The utility model is based on Choquet-like integration over combined states. The investigations show that Expected Utility, Choquet Expected Utility and Cumulative Prospect Theory are special cases of the suggested approach. We apply the suggested approach to solving a benchmark and a real-life decision problem. The obtained results show validity of the suggested approach.

scholarly journals Farm decision making under risk and uncertainty

1997 ◽  
Vol 45 (2) ◽  
pp. 307-328 ◽  
Author(s):  
G.B.C. Backus ◽  
V.R. Eidman ◽  
A.A. Dijkhuizen
Keyword(s):  
Decision Making ◽  
Expected Utility ◽  
Utility Theory ◽  
Expected Utility Theory ◽  
Decision Problems ◽  
Subjective Expected Utility ◽  
Risk And Uncertainty ◽  
Decision Making Under Risk ◽  
Agricultural Risk ◽  
Risk Research

Relevant portions of the risk literature are reviewed, relating them to observed behaviour in farm decision-making. Relevant topics for applied agricultural risk research are proposed. The concept of decision making under risk and uncertainty is discussed by reviewing the theory of Subjective Expected Utility and its limitations. Subjective Expected Utility theory is the major framework for thinking systematically through complex issues of decision. Limitations of Subjective Expected Utility theory were that its application to unique decisions is doubtful, that it does not contribute to difficulties in determining the available decision alternatives, and that it is cast in a timeless setting, making the theoretic framework to a very limited extent helpful to solve real world decision problems. Most empirical studies indicate that farmers are risk neutral to slightly risk averse. It is doubtful whether decision makers could be classified according to their risk preferences. A presented overview of applied risk responses reveals much attention for diversification of the enterprise and of production practices, maintaining reserves, and farm expansion. Research reports on observed problems in farm decision making behaviour are lacking. Proposed topics for agricultural risk research include the assessment of the need for a strategic change, the creation of databases to determine both the (co)variances of input and output prices, the effectiveness of various kinds of decision support for different decision problems, and methods for applied scenario analysis to deal with long-run risk.

UNCERTAIN DECISION MAKING AND ITS APPLICATION TO PORTFOLIO SELECTION PROBLEM

2014 ◽  
Vol 22 (01) ◽  
pp. 113-123 ◽  
Author(s):  
KAI YAO ◽  
XIAOYU JI
Keyword(s):  
Decision Making ◽  
Decision Theory ◽  
Utility Function ◽  
Portfolio Selection ◽  
Expected Utility ◽  
Random Variable ◽  
Uncertain Variable ◽  
Selection Problem ◽  
Portfolio Selection Problem ◽  
Objective Uncertainty

In the traditional decision theory, choice with undetermined consequence is usually regarded as random variable, which usually describes objective uncertainty. This paper first considers the human uncertainty in making decisions, and employs uncertain variable to describe the choice. Utility function is also employed in the paper, and expected utility is introduced as a criterion to rank the choices. At last, in order to illustrate the uncertain decision making method, a portfolio selection problem is considered.

Parties as Utility Maximizers

1973 ◽  
Vol 67 (2) ◽  
pp. 490-498 ◽  
Author(s):  
Donald A. Wittman
Keyword(s):  
Decision Making ◽  
Income Distribution ◽  
Political Party ◽  
Imperfect Information ◽  
Political Attitudes ◽  
Perfect Information ◽  
The Other

The article introduces two models of political party decision making. Both models assume that the parties are solely interested in policy and that winning the election is just a means to that end. In one, the parties are competitive, while in the other the parties collude. The main result, in either case, is that the parties tend to be unresponsive to the interests of the voters.The models are analyzed in an intransitive case (an election concerned only with income distribution) and a transitive one (an election where all political attitudes can be put on a left-right continuum), and under the assumptions of perfect and imperfect information.With perfect information the intransitive case results in the parties ending up with all the income; while in the single peaked case neither party will have a position to the left (right) of the left (right) party's most preferred position whatever the attitudes of the voters.Finally it is shown that it is rational for the parties to collude and present similar platforms.

scholarly journals Law & Economics as a Theory of Decision Making in Legal Contexts – Decision Theoretical Foundations, Their Misinterpretations and Excessive Claims of Economic Analysis of Law

2012 ◽  
pp. 34-50
Author(s):  
Magdalena Małecka
Keyword(s):  
Decision Making ◽  
Economic Analysis ◽  
Decision Theory ◽  
Prospect Theory ◽  
Expected Utility ◽  
Economic Analysis Of Law ◽  
Legal Norms ◽  
Legal Contexts ◽  
Theoretical Foundations ◽  
The Way

The article treats law & economics as a proposal of a theory of decision making in legal settings. It is emphasized that the distinction between two approaches in economic analysis of law: the neoclassical and the behavioral one, is made with reference to two different theories of decision making applied in the realm of each approach. The neoclassical approach is based on the theory of expected utility, whereas the behavioral one – on prospect theory. According to the scholars on both sides, application of decision theory might be helpful in influencing behavior by legal norms in a more sophisticated way. The claim of the article is that law & economics scholars misinterpret the assumptions and propositions of the theories and/or formulate excessive claims, if they argue that decision theoretical findings provide knowledge about the way in which people’s decisions are influenced by law.

scholarly journals Aplicación de la teoría de las decisiones a las SIEFORES en México

2017 ◽  
Vol 9 (17) ◽  
Author(s):  
Humberto Banda Ortiz ◽  
Luis Miguel González García ◽  
Denise Gómez Hernández
Keyword(s):  
Decision Making ◽  
Decision Theory ◽  
Expected Utility ◽  
Decision Making Process ◽  
El Sistema ◽  
Toma De Decisiones ◽  
Decision Making Model

Abstract: There are different theories that try to explain the decision making process. These theories set out some possible decision scenarios. In this article we applied the decision theory to the different options offered by SIEFORES yields, in order to demonstrate performance and risk in some scenario. In this paper first at all we study decision theory, following we explain the SIEFORES system in Mexico. In the last part we apply decision making model to the SIEFORES.Keywords: Decision theory, SIEFORES, the expected utility theoremResumen: Existen diferentes teorías que, bajo razonamientos matemáticos, tratan de explicar el proceso de toma de decisiones. En dichas teorías se establecen algunos de los posibles escenarios de decisión. En el presente artículo se aplica la teoría de las decisiones a las diferentes alternativas que ofrecen los rendimientos de las SIEFORES, con el fin de demostrar el rendimiento y el riesgo que, bajo diversos escenarios, proporcionan dichas alternativas. En este trabajo se plantea primeramente la teoría de las decisiones. Seguidamente se hace un recorrido por el sistema de SIEFORES en México para ubicar al lector en la problemática que nos ocupa. Finalmente se aplica el modelo de toma dedecisiones a las SIEFORES.Palabras clave: Teoría de decisiones, SIEFORES, Teorema de la Utilidad Esperada

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.

Sign in / Sign up

Export Citation Format

Share Document