Uncertainty and Risk: Mental, Formal, Experimental Representations

Description

We all feel that our world is fundamentally uncertain. But less unanimity emerges as to what we mean by "uncertainty" and how we ought to adjust. Businessmen tend to be "cautious" and engineers to pick up the "right" decision criteria among the many available in the literature, without having much justification about their respective behaviors. This book tries to sort out the different meanings of uncertainty and to discover their foundations. It shows that uncertainty can be represented using various tools and mental guidelines. Some decision criteria are then related to each case and assessed. Alternative ways to deal with risk - and risk attitude concepts - are then examined in the above perspective. Behavior under uncertainty emerges from this book as something to base more on inquiry and reflection than on mere intuition. Front Matter....Pages I-VI Introduction....Pages 1-5 Front Matter....Pages 7-7 Conjectures, Refutations and Discoveries: Incorporating New Knowledge in Models of Belief and Choice under Uncertainty....Pages 9-25 When an Event Makes a Difference....Pages 27-32 Countable Additivity and the Foundations of Bayesian Statistics....Pages 33-39 On the Quantification and Decomposition of Uncertainty....Pages 41-59 Front Matter....Pages 61-61 Preference for Diversification with Similarity Considerations....Pages 63-83 Uncertainty Improves the Second-Best....Pages 85-100 Lorenz Meets Rating but Misses Valuation....Pages 101-123 A Deeper Look at Hyperbolic Discounting....Pages 125-150 Front Matter....Pages 151-151 “Take-the-Best” and Other Simple Strategies: Why and When They Work “Well” with Binary Cues....Pages 153-185 On Generalized Secretary Problems....Pages 187-205 Voting on Alternatives or on Criteria? The Meta-Decision on Group Decision Procedures....Pages 207-219 Front Matter....Pages 221-221 Probabilistic Risk Analysis Versus Decision Analysis: Similarities, Differences and Illustrations....Pages 223-242 A Conjoint Measurement Based Rationale for Inducing Preferences....Pages 243-260 Active Search for Probability Information and Recall Performance: Is Probability an Outstanding Element in the Mental Representation of Risky Decisions?....Pages 261-274 Evolutionary Analysis of Risk Attitudes in Competitive Bidding Environments Using Simulation....Pages 275-290 Behavior in Risky Decisions: Focus on Risk Defusing....Pages 291-306 Back Matter....Pages 307-308