Related papers: Partially rational preferences under ambiguity
This paper axiomatizes, in a two-stage setup, a new theory for decision under risk and ambiguity. The axiomatized preference relation $\succeq$ on the space $\tilde{V}$ of random variables induces an ambiguity index $c$ on the space…
The roles played by decision factors in making complex subject are decisions are characterized by how these factors affect the overall decision. Evidence that partially matches a factor is evaluated, and then effective computational rules…
One of the goals of science is to understand the relation between a whole and its parts, as exemplified by the problem of certifying the entanglement of a system from the knowledge of its reduced states. Here, we focus on a different but…
Our goal is to develop a partial ordering method for comparing stochastic choice functions on the basis of their individual rationality. To this end, we assign to any stochastic choice function a one-parameter class of deterministic choice…
Possibilistic logic has been proposed as a numerical formalism for reasoning with uncertainty. There has been interest in developing qualitative accounts of possibility, as well as an explanation of the relationship between possibility and…
We study the range of prices at which a rational agent should contemplate transacting a financial contract outside a given securities market. Trading is subject to nonproportional transaction costs and portfolio constraints and full…
Bayesian inference has theoretical attractions as a principled framework for reasoning about beliefs. However, the motivations of Bayesian inference which claim it to be the only 'rational' kind of reasoning do not apply in practice. They…
The weak axiom of revealed preference (WARP) ensures that the revealed preference (i) is a preference relation (i.e., it is complete and transitive) and (ii) rationalizes the choices. However, when WARP fails, either one of these two…
The aim of this paper is to show that the concept of probability is best understood by dividing this concept into two different types of probability, namely physical probability and analogical probability. Loosely speaking, a physical…
How do entrepreneurs act on their beliefs when probabilities of outcomes are unknown but subjectively perceived? We theorize that two distinct dimensions of ambiguity attitudes influence entrepreneurial action: ambiguity aversion - the…
Selection shapes all kinds of behaviors, including how we make decisions under uncertainty. The risk attitude reflected from it should be simple, flexible, yet consistent. In this paper we engaged evolutionary dynamics to find the decision…
This paper studies optimal consumption and saving decisions under uncertainty about the transition dynamics of the economic environment. We consider a general optimal savings problem in which the exogenous state governing discounting,…
Making decisions freely presupposes that there is some indeterminacy in the environment and in the decision making engine. The former is reflected on the behavioral changes due to communicating: few changes indicate rigid environments;…
We provide an axiomatic characterization of lexicographic preferences over the set of all random availability functions using two assumptions. The first assumption is strong monotonicity, which in our framework is equivalent to the strong…
Plausible reasoning concerns situations whose inherent lack of precision is not quantified; that is, there are no degrees or levels of precision, and hence no use of numbers like probabilities. A hopefully comprehensive set of principles…
We study the satisfiability problem for the fluted fragment extended with transitive relations. The logic enjoys the finite model property when only one transitive relation is available and the finite model property is lost when…
Algorithmic modeling relies on limited information in data to extrapolate outcomes for unseen scenarios, often embedding an element of arbitrariness in its decisions. A perspective on this arbitrariness that has recently gained interest is…
In this work we show that the ordering ambiguity on quantization depends on the representation choice. This property is then used to solve unambiguously some particular systems. Finally, we speculate on the consequences for more involved…
This paper explains why internal and external validity cannot be simultaneously maximised. It introduces "evidential states" to represent the information available for causal inference and shows that routine study operations (restriction,…
We study the subtlety of optimal paternalism when a utilitarian planner has the power to design a discrete choice set for a heterogeneous population with bounded rationality. We first consider the planning problem in abstraction. We show…