Related papers: Non-Allais Paradox and Context-Dependent Risk Atti…
Nguyen et al. [1] introduced altruistic hedonic games in which agents' utilities depend not only on their own preferences but also on those of their friends in the same coalition. We propose to extend their model to coalition formation…
In economics, risk aversion is modeled via a concave Bernoulli utility within the expected-utility paradigm. We propose a simple test of expected utility and concavity. We find little support for either: only 30 percent of the choices are…
This paper investigates the dynamics of gambling and how they can affect risk-taking behavior in regions not explored by Kahneman and Tversky's Prospect Theory. Specifically, it questions why extreme outcomes do not fit the theory and…
We bound features of counterfactual choices in the nonparametric random utility model of demand, i.e. if observable choices are repeated cross-sections and one allows for unrestricted, unobserved heterogeneity. In this setting, tight bounds…
Gambles are random variables that model possible changes in monetary wealth. Classic decision theory transforms money into utility through a utility function and defines the value of a gamble as the expectation value of utility changes.…
Social decision schemes (SDSs) map the ordinal preferences of individual voters over multiple alternatives to a probability distribution over the alternatives. In order to study the axiomatic properties of SDSs, we lift preferences over…
Income- and price-elasticity of demand quantify the responsiveness of markets to changes in income, and in prices, respectively. Under the assumptions of utility maximization and preference-independence (additive preferences), mathematical…
Traditional learning approaches for classification implicitly assume that each mistake has the same cost. In many real-world problems though, the utility of a decision depends on the underlying context $x$ and decision $y$. However,…
This paper studies how violations of structural assumptions like expected utility and exponential discounting can be connected to basic rationality violations, even though these assumptions are typically regarded as independent building…
We present a new strategic voting model where we use uncertainty representation to model preferences. Specifically, we use probability sets as uncertainty representations, together with lower and upper expected utility gains to take…
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…
Orseau and Ring, as well as Dewey, have recently described problems, including self-delusion, with the behavior of agents using various definitions of utility functions. An agent's utility function is defined in terms of the agent's history…
The standard way to evaluate language models on subjective tasks is through pairwise comparisons: an annotator chooses the "better" of two responses to a prompt. Leaderboards aggregate these comparisons into a single Bradley-Terry (BT)…
We propose a robust method of discrete choice analysis when agents' choice sets are unobserved. Our core model assumes nothing about agents' choice sets apart from their minimum size. Importantly, it leaves unrestricted the dependence,…
A Bayesian design is given by maximising an expected utility over a design space. The utility is chosen to represent the aim of the experiment and its expectation is taken with respect to all unknowns: responses, parameters and/or models.…
Motivated by several classic decision-theoretic paradoxes, and by analogies with the paradoxes which in physics motivated the development of quantum mechanics, we introduce a projective generalization of expected utility along the lines of…
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…
This paper introduces the axiom of Negative Dominance, stating that if a lottery $f$ is strictly preferred to a lottery $g$, then some outcome in the support of $f$ is strictly preferred to some outcome in the support of $g$. It is shown…
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…
The combination of the Bayesian game and learning has a rich history, with the idea of controlling a single agent in a system composed of multiple agents with unknown behaviors given a set of types, each specifying a possible behavior for…