Related papers: Utility of Choice: An Information Theoretic Approa…
Towards the realization of a sustainable, fair and inclusive society, we proposed a novel decision-making model that incorporates social norms in a rational choice model from the standpoints of deontology and utilitarianism. We proposed a…
Ensuring the usefulness of electronic data sources while providing necessary privacy guarantees is an important unsolved problem. This problem drives the need for an analytical framework that can quantify the safety of personally…
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…
The paper provides an algorithm for the risk estimation when a company selects an outsourcing service provider for innovation product. Calculations are based on expert surveys conducted among customers and among providers of outsourcing.…
We introduce a new approach to incorporate uncertainty into the decision to invest in a commodity reserve. The investment is an irreversible one-off capital expenditure, after which the investor receives a stream of cashflow from extracting…
We consider the robust exponential utility maximization problem in discrete time: An investor maximizes the worst case expected exponential utility with respect to a family of nondominated probabilistic models of her endowment by…
Fashion preference is a fuzzy concept that depends on customer taste, prevailing norms in fashion product/style, henceforth used interchangeably, and a customer's perception of utility or fashionability, yet fashion e-retail relies on…
When faced with complex choices, users refine their own preference criteria as they explore the catalogue of options. In this paper we propose an approach to preference elicitation suited for this scenario. We extend Coactive Learning,…
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…
In an incomplete market, including liquidly-traded European options in an investment portfolio could potentially improve the expected terminal utility for a risk-averse investor. However, unlike the Sharpe ratio, which provides a concise…
Classical Decision Theory provides a normative framework for representing and reasoning about complex preferences. Straightforward application of this theory to automate decision making is difficult due to high elicitation cost. In response…
Online offerings such as web search, news portals, and e-commerce applications face the challenge of providing high-quality service to a large, heterogeneous user base. Recent efforts have highlighted the potential to improve performance by…
We consider a problem of optimal investment with intermediate consumption and random endowment in an incomplete semimartingale model of a financial market. We establish the key assertions of the utility maximization theory assuming that…
Although many investigators affirm a desire to build reasoning systems that behave consistently with the axiomatic basis defined by probability theory and utility theory, limited resources for engineering and computation can make a complete…
Determining consumer preferences and utility is a foundational challenge in economics. They are central in determining consumer behaviour through the utility-maximising consumer decision-making process. However, preferences and utilities…
Typically, merit is defined with respect to some intrinsic measure of worth. We instead consider a setting where an individual's worth is \emph{relative}: when a Decision Maker (DM) selects a set of individuals from a population to maximise…
In mechanical design, there is often unavoidable uncertainty in estimates of design performance. Evaluation of design alternatives requires consideration of the impact of this uncertainty. Expert heuristics embody assumptions regarding the…
The most commonly accepted model for investors' preferences is expected utility theory. More recently, other theories have emerged and pose new challenges to mathematics. The present paper treats preferences of cumulative prospect theory…
Active inference, a corollary of the free energy principle, is a formal way of describing the behavior of certain kinds of random dynamical systems that have the appearance of sentience. In this chapter, we describe how active inference…
This article presents a pragmatic framework for making formal, utility-based decisions from statistical inferences. The method calculates an expected utility score for an intervention by combining Bayesian posterior probabilities of…