Related papers: Axiomatic Foundations for a Class of Generalized E…
In the present article we use the quantum formalism to describe the effects of risk and ambiguity in decision theory. The main idea is that the probabilities in the classic theory of expected utility are estimated probabilities, and thus do…
We present the first nontrivial procedure for configuring heuristic algorithms to maximize the utility provided to their end users while also offering theoretical guarantees about performance. Existing procedures seek configurations that…
An algebraic extended bilinear Hilbert semispace is proposed as being the natural representation space for the algebras of von Neumann.This bilinear Hilbert semispace has a well defined structure given by the representation space of an…
Active inference is a leading theory of perception, learning and decision making, which can be applied to neuroscience, robotics, psychology, and machine learning. Active inference is based on the expected free energy, which is mostly…
The 'expected utility hypothesis' and 'Savage's Sure-Thing Principle' are violated in real life decisions, as shown by the 'Allais' and 'Ellsberg paradoxes'. The popular explanation in terms of 'ambiguity aversion' is not completely…
In this work, we propose an axiomatic approach for measuring the performance/welfare of a system consisting of concurrent agents in a resource-driven system. Our approach provides a unifying view on popular system optimality principles,…
We develop a synthesis of Turing's paradigm of computation and von Neumann's quantum logic to serve as a model for quantum computation with recursion, such that potentially non-terminating computation can take place, as in a quantum Turing…
This article demonstrates how a large number of efficiency measures known in the literature in production economics can be interpreted through the notion of utility function, based on the concept of Stone-Geary utility. Several…
We introduce a new interpretation of two related notions - conditional utility and utility independence. Unlike the traditional interpretation, the new interpretation renders the notions the direct analogues of their probabilistic…
In cases of uncertainty, a multi-class classifier preferably returns a set of candidate classes instead of predicting a single class label with little guarantee. More precisely, the classifier should strive for an optimal balance between…
We develop a preference elicitation method for a Von Neumann-Morgenstern (VNM)-type decision-maker from pairwise comparison data in the presence of response errors. We apply the maximum likelihood estimation (MLE) method to jointly elicit…
The Machina thought experiments pose to major non-expected utility models challenges that are similar to those posed by the Ellsberg thought experiments to subjective expected utility theory (SEUT). We test human choices in the `Ellsberg…
We consider an infinite dimensional optimization problem motivated by mathematical economics. Within the celebrated "Arbitrage Pricing Model", we use probabilistic and functional analytic techniques to show the existence of optimal…
Humans currently use arguments for explaining choices which are already made, or for evaluating potential choices. Each potential choice has usually pros and cons of various strengths. In spite of the usefulness of arguments in a decision…
When it comes to structural estimation of risk preferences from data on choices, random utility models have long been one of the standard research tools in economics. A recent literature has challenged these models, pointing out some…
We study the problem of modeling a binary operation that satisfies some algebraic requirements. We first construct a neural network architecture for Abelian group operations and derive a universal approximation property. Then, we extend it…
In this paper we use the framework of generalized probabilistic theories to present two sets of basic assumptions, called axioms, for which we show that they lead to the Hilbert space formulation of quantum mechanics. The key results in…
This paper develops and implements a nonparametric test of Random Utility Models. The motivating application is to test the null hypothesis that a sample of cross-sectional demand distributions was generated by a population of rational…
We perform a stability analysis for the utility maximization problem in a general semimartingale model where both liquid and illiquid assets (random endowments) are present. Small misspecifications of preferences (as modeled via expected…
In [Incer Romeo, I. X., \textit{The Algebra of Contracts}. Ph.D. Thesis, UC Berkeley (2022)] an algebraic perspective on assume-guarantee contracts is proposed. This proposal relies on a construction involving Boolean algebras. However, the…