Related papers: Censored Beliefs and Wishful Thinking
Diversification represents the idea of choosing variety over uniformity. Within the theory of choice, desirability of diversification is axiomatized as preference for a convex combination of choices that are equivalently ranked. This…
I revisit the standard moral-hazard model, in which an agent's preference over contracts is rooted in costly effort choice. I characterise the behavioural content of the model in terms of empirically testable axioms, and show that the…
We propose and axiomatize a new model of incomplete preferences under uncertainty, which we call \textit{hope-and-prepare preferences}. An act is considered more desirable than an other act when, and only when, both an optimistic…
In recent studies of political decision-making, apparently anomalous behavior has been observed on the part of voters, in which negative information about a candidate strengthens, rather than weakens, a prior positive opinion about the…
This paper develops a model of reference-dependent assessment of subjective beliefs in which loss-averse people optimally choose the expectation as the reference point to balance the current felicity from the optimistic anticipation and the…
As artificial agents become increasingly capable, what internal structure is *necessary* for an agent to act competently under uncertainty? Classical results show that optimal control can be *implemented* using belief states or world…
I consider decision-making constrained by considerations of morality, rationality, or other virtues. The decision maker (DM) has a true preference over outcomes, but feels compelled to choose among outcomes that are top-ranked by some…
This paper provides a model to analyze and identify a decision maker's (DM's) hypothetical reasoning. Using this model, I show that a DM's propensity to engage in hypothetical thinking is captured exactly by her ability to recognize…
People are often reluctant to sell a house, or shares of stock, below the price at which they originally bought it. While this is generally not consistent with rational utility maximization, it does reflect two strong empirical regularities…
We present a general logical framework for reasoning about agents' cognitive attitudes of both epistemic type and motivational type. We show that it allows us to express a variety of relevant concepts for qualitative decision theory…
Approaches to decision-making under uncertainty in the belief function framework are reviewed. Most methods are shown to blend criteria for decision under ignorance with the maximum expected utility principle of Bayesian decision theory. A…
Choice functions constitute a simple, direct and very general mathematical framework for modelling choice under uncertainty. In particular, they are able to represent the set-valued choices that typically arise from applying decision rules…
To choose between two discrete goods, a consumer pays attention to only those with prices below a threshold. From these, she chooses her most preferred good. We assume consumers in a population have the same preference but may have…
We initiate the study of voting rules for participatory budgeting using the so-called epistemic approach, where one interprets votes as noisy reflections of some ground truth regarding the objectively best set of projects to fund. Using…
The principle that rational agents should maximize expected utility or choiceworthiness is intuitively plausible in many ordinary cases of decision-making under uncertainty. But it is less plausible in cases of extreme, low-probability risk…
Reliable uncertainty quantification is essential in survival prediction, particularly in clinical settings where erroneous decisions carry high risk. Conformal prediction has attracted substantial attention as it offers a model-agnostic…
Travel time savings are usually the most substantial economic benefit of transport infrastructure projects. However, questions surround whether small time savings are as valuable per unit as larger savings. Thresholds in individual choice…
Heavy-tailed impact distributions, intrinsic uncertainty, and the high costs of proposal-based peer review increasingly challenge research funding decisions. Using large-scale bibliometric data, we show that past scientific performance…
In a consideration set model, an individual maximizes utility among the considered alternatives. I relate a consideration set additive random utility model to classic discrete choice and the extended additive random utility model, in which…
In the present paper we investigate the predictive risk of possibly misspecified quantile regression functions. The in-sample risk is well-known to be an overly optimistic estimate of the predictive risk and we provide two relatively simple…