Related papers: Subjective Expected Utility and Psychological Gamb…
We demonstrate a limitation of discounted expected utility, a standard approach for representing the preference to risk when future cost is discounted. Specifically, we provide an example of the preference of a decision maker that appears…
The law of maturity is the belief that less-observed events are becoming mature and, therefore, more likely to occur in the future. Previous studies have shown that the assumption of infinite exchangeability contradicts the law of maturity.…
Positivity, the assumption that every unique combination of confounding variables that occurs in a population has a non-zero probability of an action, can be further delineated as deterministic positivity and stochastic positivity. Here, we…
Nash equilibrium serves as a fundamental mathematical tool in economics and game theory. However, it classically assumes knowledge of player utilities, whereas economics generally regards preferences as more fundamental. To leverage…
A classical portfolio theory deals with finding the optimal proportion in which an agent invests a wealth in a risk-free asset and a probabilistic risky asset. Formulating and solving the problem depend on how the risk is represented and…
The standard coherence criterion for lower previsions is expressed using an infinite number of linear constraints. For lower previsions that are essentially defined on some finite set of gambles on a finite possibility space, we present a…
This paper initiates the study of the testable implications of choice data in settings where agents have privacy preferences. We adapt the standard conceptualization of consumer choice theory to a situation where the consumer is aware of,…
Purely affective interaction allows the welfare of an individual to depend on her own actions and on the profile of welfare levels of others. Under an assumption on the structure of mutual affection that we interpret as "non-explosive…
Actual individual preferences are neither complete (=total) nor antisymmetric in general, so that at least every quasi-order must be an admissible input to a satisfactory choice rule. It is argued that the traditional notion of…
In statistical physics, the conservation of particle number results in the equalization of the chemical potential throughout a system at equilibrium. In contrast, the homogeneity of utility in socio-economic models is usually thought to…
We provide an epistemic analysis of arbitrary strategic games based on possibility correspondences. We first establish a generic result that links true common beliefs (and, respectively, common knowledge) of players' rationality defined by…
The maximum entropy principle can be used to assign utility values when only partial information is available about the decision maker's preferences. In order to obtain such utility values it is necessary to establish an analogy between…
We provide here an epistemic analysis of arbitrary strategic games based on the possibility correspondences. Such an analysis calls for the use of transfinite iterations of the corresponding operators. Our approach is based on Tarski's…
Several non-linear functions and machine learning methods have been developed for flexible specification of the systematic utility in discrete choice models. However, they lack interpretability, do not ensure monotonicity conditions, and…
We consider how an agent should update her uncertainty when it is represented by a set $\P$ of probability distributions and the agent observes that a random variable $X$ takes on value $x$, given that the agent makes decisions using the…
In this paper, we formulate a qualitative "linear" utility theory for lotteries in which uncertainty is expressed qualitatively using a Spohnian disbelief function. We argue that a rational decision maker facing an uncertain decision…
Possibilistic risk theory starts from the hypothesis that risk is modelled by fuzzy numbers. In particular, in a possibilistic portfolio choice problem, the return of a risky asset will be a fuzzy number. The expected utility operators have…
While previous sentiment analysis research has concentrated on the interpretation of explicitly stated opinions and attitudes, this work initiates the computational study of a type of opinion implicature (i.e., opinion-oriented inference)…
Mutual relationships, such as cooperation and exploitation, are the basis of human and other biological societies. The foundations of these relationships are rooted in the decision making of individuals, and whether they choose to be…
Many different rules for decision making have been introduced in the literature. We show that a notion of generalized expected utility proposed in Part I of this paper is a universal decision rule, in the sense that it can represent…