scholarly journals Stochastic representation decision theory: How probabilities and values are entangled dual characteristics in cognitive processes

PLoS ONE ◽  
2020 ◽  
Vol 15 (12) ◽  
pp. e0243661
Author(s):  
Giuseppe M. Ferro ◽  
Didier Sornette
Keyword(s):  
Decision Making ◽  
Decision Maker ◽  
Time Pressure ◽  
Rational Expectation ◽  
Weighting Function ◽  
Objective Probability ◽  
Decision Making Process ◽  
Stochastic Representation ◽  
Human Decision ◽  
Expectation Theory

Humans are notoriously bad at understanding probabilities, exhibiting a host of biases and distortions that are context dependent. This has serious consequences on how we assess risks and make decisions. Several theories have been developed to replace the normative rational expectation theory at the foundation of economics. These approaches essentially assume that (subjective) probabilities weight multiplicatively the utilities of the alternatives offered to the decision maker, although evidence suggest that probability weights and utilities are often not separable in the mind of the decision maker. In this context, we introduce a simple and efficient framework on how to describe the inherently probabilistic human decision-making process, based on a representation of the deliberation activity leading to a choice through stochastic processes, the simplest of which is a random walk. Our model leads naturally to the hypothesis that probabilities and utilities are entangled dual characteristics of the real human decision making process. It predicts the famous fourfold pattern of risk preferences. Through the analysis of choice probabilities, it is possible to identify two previously postulated features of prospect theory: the inverse S-shaped subjective probability as a function of the objective probability and risk-seeking behavior in the loss domain. It also predicts observed violations of stochastic dominance, while it does not when the dominance is “evident”. Extending the model to account for human finite deliberation time and the effect of time pressure on choice, it provides other sound predictions: inverse relation between choice probability and response time, preference reversal with time pressure, and an inverse double-S-shaped probability weighting function. Our theory, which offers many more predictions for future tests, has strong implications for psychology, economics and artificial intelligence.

scholarly journals Fixation patterns in simple choice reflect optimal information sampling

2019 ◽  
Author(s):  
Frederick Callaway ◽  
Antonio Rangel ◽  
Tom Griffiths
Keyword(s):  
Decision Making ◽  
Decision Maker ◽  
Sequential Sampling ◽  
Empirical Work ◽  
Reaction Times ◽  
Optimal Solution ◽  
Cognitive Resources ◽  
Human Decision ◽  
Information Sampling ◽  
Optimal Information

When faced with a decision between several options, people rarely fully consider every alternative. Instead, we direct our attention to the most promising candidates, focusing our limited cognitive resources on evaluating the options that we are most likely to choose. A growing body of empirical work has shown that attention plays an important role in human decision making, but it is still unclear how people choose with option to attend to at each moment in the decision making process. In this paper, we present an analysis of how a rational decision maker should allocate her attention. We cast attention allocation in decision making as a sequential sampling problem, in which the decision maker iteratively selects from which distribution to sample in order to update her beliefs about the values of the available alternatives. By approximating the optimal solution to this problem, we derive a model in which both the selection and integration of evidence are rational. This model predicts choices and reaction times, as well as sequences of visual fixations. Applying the model to a ternary-choice dataset, we find that its predictions align well with human data.

scholarly journals Support of decision-making under risk by a risk-averse decision-maker

2020 ◽  
Vol 13 ◽  
Author(s):  
Andrzej Łodziński
Keyword(s):  
Decision Making ◽  
Decision Support ◽  
Decision Maker ◽  
The State ◽  
Decision Making Process ◽  
Discrete Problem ◽  
Risk Averse ◽  
Control Parameters ◽  
Decision Making Under Risk ◽  
State Of The Environment

The paper presents the decision support under risk by the risk averse decision maker. Decision making under risk occurs when the result of the decision is not unequivocal and depends on the state of the environment. The decision making process is modeled with the use of multi-criteria optimization. The decision is made by solving the problem with the control parameters that determine the decision maker's aspirations and the evaluation of the solutions received. The decision maker asks the parameter for which the solution is determined. Then, evaluate the solution received accepting or rejecting it. In the second case, the decision maker gives a new parameter value and the problem is solved again for the new parameter. The work includes an simple discrete problem of decision support under risk

scholarly journals Pengelolaan Media Sosial pada Usaha XYZ

2020 ◽  
Vol 13 (2) ◽  
pp. 1-7
Author(s):  
Nuraini Arifianti ◽  
Nunuk Adiarni
Keyword(s):  
Decision Making ◽  
Social Media ◽  
Decision Maker ◽  
Evaluation Process ◽  
Decision Making Process ◽  
Business Goals ◽  
The Social ◽  
Negative Comments ◽  
Content Evaluation ◽  
Marketing Messages

The social media is currently not only used for social friendship but also for business purpose.The people use line, whatshapp, instagram and facebook. Related to business goals, the content is made possible by availability of the applications to convey marketing messages to customers. This requires creative message and content creators, which work in team with decision maker and administrator. However, it’s need  to continuously manage it. This study was aimed to find out how the management of social media in XYZ businesses using descriptive qualitative. Instagram management implemented by XYZ starts from setting target customers to the content evaluation process. However, it has not comprehensively been managed unless it responds to negative comments from followers. The results of the study prove that using the social media such as Instagram in marketing requires management by planning, organizing and decision making process for creative content and followed by an evaluation and handling follower responses.

Modern Financial Market Theory – A Critique Based on the Logic of Human Action

2021 ◽  
Vol 54 (3) ◽  
pp. 447-467
Author(s):  
Thorsten Polleit
Keyword(s):  
Decision Making ◽  
Financial Markets ◽  
Financial Market ◽  
Real World ◽  
Rational Expectation ◽  
Efficient Market Hypothesis ◽  
Human Action ◽  
Market Theory ◽  
Expectation Theory ◽  
Market Economics

The modern financial market theory (MFMT) – based on the efficient market hypothesis, rational expectation theory, and modern portfolio theory – has become the standard approach in financial market economics. In this article, the MFMT will be critically ­reviewed using the logic of human action (or: praxeology) as an epistemological meta­theory. It will be shown that the MFMT exhibits (praxeo-)logical deficiencies so that it cannot provide investors with well-founded decision-making support in real-world financial markets.

Who Should be Involved in the Selection Of Venous Access Devices?

2004 ◽  
Vol 9 (1) ◽  
pp. 41-43
Author(s):  
Cynthia Chernecky ◽  
Katherine Nugent ◽  
Jennifer L. Waller ◽  
Denise Macklin
Keyword(s):  
Decision Making ◽  
Decision Maker ◽  
Vascular Access ◽  
Venous Access ◽  
Decision Making Process ◽  
Convenience Sample ◽  
Vascular Access Devices ◽  
Race And Gender ◽  
And Gender ◽  
Selection Of

Abstract The purposes of this study were to describe who should be involved in the vascular access device (VAD) decision-making process, according to patients and caregivers, and to describe if there were differences associated with persons involved in the selection of VADs according to race and gender. Convenience sample included 32 oncology out-patients and 10 caregivers from the southern United States. There were differences by race and sex in decision-making priorities of patients with vascular access devices indwelling; however, these were not statistically significant. Patients, physicians, and oncology nurses were viewed by both patients and caregivers as significant to the decision-making process. In contrast, caregivers were ranked as the least significant by both patients and caregivers. Females chose the physician as the primary decision-maker while males chose the patient as the primary decision-maker.

scholarly journals The impact of information technology in decision making process of companies in Kosovo

2018 ◽  
Vol 51 (1-2) ◽  
pp. 13-23
Author(s):  
Emin Qerim Neziraj ◽  
Aferdita Berisha Shaqiri
Keyword(s):  
Decision Making ◽  
Information Technology ◽  
Decision Maker ◽  
Business Process ◽  
New Technologies ◽  
Decision Makers ◽  
Decision Making Process ◽  
Or Organization ◽  
The Impact ◽  
Future Business

Before the decision makers set much higher requirements in the decision-making than ever before due to the environment of decision-makers subject to change under the influence of progress and development of new technologies, networking individual or organization inside and the outside environment, and modern means of communication enabling continuous inflow, flow and sharing of data and information. In these modern conditions the process of collecting, analyzing, selecting data and information to make informed decisions in the context of possible restrictions and the available options, and ultimately making decisions as the basis for future business or behavior, is not simplified. The use of new technologies in the decision-making process provided numerous opportunities to facilitate decisions selection. However, the decision maker should still be able to differentiate which knowledge should be used to serve in decision making, and which models, methods, tools, systems, and procedures to be used in certain situations, with the purpose of successful decision selection. In this paper, we will examine the decision making process during the business process of the companies in Kosovo.

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