Related papers: Decision theory and the "almost implies near" phen…

Given a universe of discourse X-a domain of possible outcomes-an experiment may consist of selecting one of its elements, subject to the operation of chance, or of observing the elements, subject to imprecision. A priori uncertainty about…

Most work in mechanism design assumes that buyers are risk neutral; some considers risk aversion arising due to a non-linear utility for money. Yet behavioral studies have established that real agents exhibit risk attitudes which cannot be…

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…

Analyzing decision problems under uncertainty commonly relies on idealizing assumptions about the describability of the world, with the most prominent examples being the closed world and the small world assumption. Most assumptions are…

We provide a formal framework accounting for a widespread idea in the theory of economic design: analytically established incompatibilities between given axioms should be qualified by the likelihood of their violation. We define the degree…

This paper studies choice situations in which a decision maker can choose multiple alternatives. Given a menu of available options, the decision maker selects a subset of the menu with certain probabilities. We employ an axiomatic approach…

We propose a conceptual framework for counterfactual and welfare analysis for approximate models. Our key assumption is that model approximation error is the same magnitude at new choices as the observed data. Applying the framework to…

We provide an economic interpretation of the practice consisting in incorporating risk measures as constraints in a classic expected return maximization problem. For what we call the infimum of expectations class of risk measures, we show…

A recent line of work, starting with Beigman and Vohra (2006) and Zadimoghaddam and Roth (2012), has addressed the problem of {\em learning} a utility function from revealed preference data. The goal here is to make use of past data…

We derive axiomatically the probability function that should be used to make decisions given any form of underlying uncertainty.

In this paper we analyze two recent axiomatic approaches proposed by Dubois et al and by Giang and Shenoy to qualitative decision making where uncertainty is described by possibility theory. Both axiomtizations are inspired by von Neumann…

Classical decision theory models behaviour in terms of utility maximisation where utilities represent rational preference relations over outcomes. However, empirical evidence and theoretical considerations suggest that we need to go beyond…

We establish the equivalence between a principle of almost absence of arbitrage opportunities and nearly rational decision-making. The implications of such principle are considered in the context of the aggregation of probabilistic opinions…

We characterize those ex-ante restrictions on the random utility model which lead to identification. We first identify a simple class of perturbations which transfer mass from a suitable pair of preferences to the pair formed by swapping…

We study consumption dependence in the context of random utility and repeated choice. We show that, in the presence of consumption dependence, the random utility model is a misspecified model of repeated rational choice. This…

When we test a theory using data, it is common to focus on correctness: do the predictions of the theory match what we see in the data? But we also care about completeness: how much of the predictable variation in the data is captured by…

In this paper, we first consider a Bayesian framework and model the "utility function" in terms of fuzzy random variables. On the basis of this model, we define the "prior (fuzzy) expected utility" associated with each action, and the…

Ergodicity describes an equivalence between the expectation value and the time average of observables. Applied to human behaviour, ergodic theories of decision-making reveal how individuals should tolerate risk in different environments. To…

In this work we generalize standard Decision Theory by assuming that two outcomes can also be incomparable. Two motivating scenarios show how incomparability may be helpful to represent those situations where, due to lack of information,…

We characterize Pareto optimality via "near" weighted utilitarian welfare maximization. One characterization sequentially maximizes utilitarian welfare functions using a finite sequence of nonnegative and eventually positive welfare…