Advances in Decision Making Under Risk and Uncertainty

Description

Whether we like it or not we all feel that the world is uncertain. From choosing a new technology to selecting a job, we rarely know in advance what outcome will result from our decisions. Unfortunately, the standard theory of choice under uncertainty developed in the early forties and fifties turns out to be too rigid to take many tricky issues of choice under uncertainty into account. The good news is that we have now moved away from the early descriptively inadequate modeling of behavior. This book brings the reader into contact with the accomplished progress in individual decision making through the most recent contributions to uncertainty modeling and behavioral decision making. It also introduces the reader into the many subtle issues to be resolved for rational choice under uncertainty. Front Matter....Pages i-xiii Revealed Ambiguity and Its Consequences: Updating....Pages 3-18 Dynamic Decision Making When Risk Perception Depends on Past Experience....Pages 19-32 Representation of Conditional Preferences Under Uncertainty....Pages 33-47 Subjective Information in Decision Making and Communication....Pages 49-62 Sensitivity Analysis in Decision Making: A Consistent Approach....Pages 65-89 Alternation Bias and the Parameterization of Cumulative Prospect Theory....Pages 91-107 Proposing a Normative Basis for the S-Shaped Value Function....Pages 109-118 Individual Choice from a Convex Lottery Set: Experimental Evidence....Pages 121-135 Temptations and Dynamic Consistency....Pages 137-150 Monty Hall’s Three Doors for Dummies....Pages 151-162 Overconfidence in Predictions as an Effect of Desirability Bias....Pages 163-180 Granny Versus Game Theorist: Ambiguity in Experimental Games....Pages 183-204 Guessing Games and People Behaviours: What Can We Learn?....Pages 205-217 The Determinants of Individual Behaviour in Network Formation: Some Experimental Evidence....Pages 219-241