Related papers: Non-Classical Expected Utility Theory
Probability forecasts are intended to account for the uncertainties inherent in forecasting. It is suggested that from an end-user's point of view probability is not necessarily sufficient to reflect uncertainties that are not simply the…
An approach is presented treating decision theory as a probabilistic theory based on quantum techniques. Accurate definitions are given and thorough analysis is accomplished for the quantum probabilities describing the choice between…
This paper introduces a space of variable lotteries and proves a constructive version of the expected utility theorem. The word ``constructive'' is used here in two senses. First, as in constructive mathematics, the logic underlying proofs…
Theoretically as well as experimentally it is investigated how people represent their knowledge in order to make decisions or to share their knowledge with others. Experiment 1 probes into the ways how people 6ather information about the…
The probabilistic predictions of quantum theory are conventionally obtained from a special probabilistic axiom. But that is unnecessary because all the practical consequences of such predictions follow from the remaining, non-probabilistic,…
This paper formulates a model of utility for a continuous time framework that captures the decision-maker's concern with ambiguity about both the drift and volatility of the driving process. At a technical level, the analysis requires a…
In this article we demonstrate how algorithmic probability theory is applied to situations that involve uncertainty. When people are unsure of their model of reality, then the outcome they observe will cause them to update their beliefs. We…
The Allais and Ellsberg paradoxes show that the expected utility hypothesis and Savage's Sure-Thing Principle are violated in real life decisions. The popular explanation in terms of 'ambiguity aversion' is not completely accepted. On the…
We develop a design-based framework for causal inference that accommodates random potential outcomes without introducing outcome models, thereby extending the classical Neyman--Rubin paradigm in which outcomes are treated as fixed. By…
L.J. Savage once hoped to show that "the superficially incompatible systems of ideas associated on the one hand with [subjective Bayesianism] and on the other hand with [classical statistics]...lend each other mutual support and…
The ideas of aleatoric and epistemic uncertainty are widely used to reason about the probabilistic predictions of machine-learning models. We identify incoherence in existing discussions of these ideas and suggest this stems from the…
Ambiguity and ambiguity aversion have been widely studied in decision theory and economics both at a theoretical and an experimental level. After Ellsberg's seminal studies challenging subjective expected utility theory (SEUT), several…
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…
If uncertainty is modelled by a probability measure, decisions are typically made by choosing the option with the highest expected utility. If an imprecise probability model is used instead, this decision rule can be generalised in several…
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…
Game theory relies heavily on the availability of cardinal utility functions, but in fields such as matching markets, only ordinal preferences are typically elicited. The literature focuses on mechanisms with simple dominant strategies, but…
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…
The famous Saint Petersburg Paradox (St. Petersburg Paradox) shows that the theory of expected value does not capture the real-world economics of decision-making problems. Over the years, many economic theories were developed to resolve the…
We study stability properties of the expected utility function in Bayesian optimal experimental design. We provide a framework for this problem in a non-parametric setting and prove a convergence rate of the expected utility with respect to…
People often deviate from expected utility theory when making risky and intertemporal choices. While the effects of probabilistic risk and time delay have been extensively studied in isolation, their interplay and underlying theoretical…