167 research outputs found
Transitive regret
Preferences may arise from regret, i.e., from comparisons with alternatives forgone by the decision maker. We ask whether regret-based behavior is consistent with non-expected utility theories of transitive choice and show that the answer is no. If choices are governed by ex ante regret and rejoicing then non-expected utility preferences must be intransitive.Regret, transitivity, non-expected utility
The Measure Representation: A Correction
Wakker [9] and Puppe [2] point out a mistake in Theorem 1 in Segal [6]. This theorem deals with representing preference relations over lotteries by the measure of their epigraphs. An error in the theorem is that it gives wrong conditions concerning the continuity of the measure. This paper corrects the error. Another problem is that the axioms do not imply that the measure is bounded, therefore the measure representation applies only to subsets of the space of lotteries, although these subsets can become arbitrarily close to the whole space of lotteries. Some additional axioms (Segal [6, 7]), implying that the measure is a product measure (and hence anticipated utility), also guarantee that the measure is bounded
Dual Betweenness
A key feature of the rank dependent model for decision making under risk is that the weighting of an outcome depends on its relative rank. This theory received numerous axiomatizations, however, all these sets of axioms need to make an explicit reference to the ranking of the outcomes. This situation is unsatisfactory, as it seems to be desirable to get the ranking property of this model as a consequence of the model, rather than as an assumption. Yaari [9] offered a special version of this model (called dual theory), where the utility function is linear. This paper offers a set of axioms implying a generalization of Yaari's dual theory, without making any reference to the order of the outcomes. The main axiom is called dual betweenness, which, unlike the usual case, is made on random variables rather than distribution functions. We thank SSHRCC and the Israel Institute of Business Research for financial support. y Faculty of Management, Tel Aviv University, Tel Aviv 6997..
Tit for Tat: Foundations of Preferences for Reciprocity in Strategic Settings
This paper assumes that in addition to the conventional (sel sh) preferences over outcomes, players in a strategic environment have preferences over strategies. In the context of two-player games, it provides conditions under which a player's preferences over strategies can be represented as a weighted average of the individual's sel sh payo s and the sel sh payo s of the opponent. The weight one player places on the opponent's sel sh utility depends of the opponent's behavior. In this way, the framework is rich enough to describe the behavior of individuals who repay kindness with kindness and meanness with meanness. The paper assumes that each player has an ordering over his opponent's strategies that describes the niceness of these strategies. It introduces a condition that insures that the weight on opponent's utility increases if and only if the opponent chooses a nicer strategy
Preferences and social influence
Interaction between decision makers may affect their preferences. We consider a setup in which each individual is characterized by two sets of preferences: his unchanged core preferences and his behavioral preferences. Each individual has a social influence function that determines his behavioral preferences given his core preferences and the behavioral preferences of other individuals in his group. Decisions are made according to behavioral preferences. The paper considers different properties of these social influence functions and their effect on equilibrium behavior. We illustrate the applicability of our model by considering decision making by a committee that has a deliberation stage prior to votin
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