Journal ArticleDOI
A theory of anticipated utility
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In this paper, a cardinal utility theory with an associated set of axioms is presented, which is a generalization of the von Neumann-Morgenstern expected utility theory, which permits the analysis of phenomena associated with the distortion of subjective probability.Abstract:
A new theory of cardinal utility, with an associated set of axioms, is presented. It is a generalization of the von Neumann-Morgenstern expected utility theory, which permits the analysis of phenomena associated with the distortion of subjective probability.read more
Citations
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Journal ArticleDOI
Advances in prospect theory: cumulative representation of uncertainty
Amos Tversky,Daniel Kahneman +1 more
TL;DR: Cumulative prospect theory as discussed by the authors applies to uncertain as well as to risky prospects with any number of outcomes, and it allows different weighting functions for gains and for losses, and two principles, diminishing sensitivity and loss aversion, are invoked to explain the characteristic curvature of the value function and the weighting function.
Book ChapterDOI
Rational choice and the framing of decisions
Amos Tversky,Daniel Kahneman +1 more
TL;DR: In this article, the authors trace the violations of the rational theory of choice to the rules that govern the framing of decision and to the psychological principles of evaluation embodied in prospect theory, and argue that these rules are normatively essential but descriptively invalid.
Journal ArticleDOI
Individual differences in reasoning: Implications for the rationality debate?
TL;DR: In this paper, the authors examined the implica- tions of individual differences in performance for each of the four explanations of the normative/descriptive gap, including performance errors, computational limitations, the wrong norm being applied by the experi- menter, and a different construal of the task by the subject.
Book ChapterDOI
Subjective probability and expected utility without additivity
TL;DR: In this paper, an axiom of comonotonic independence is introduced, which weakens the von Neumann-Morgenstern axiom for independence, and the expected utility of an act with respect to the nonadditive probability is computed using the Choquet integral.
Book
Lectures on Stochastic Programming: Modeling and Theory
TL;DR: The authors dedicate this book to Julia, Benjamin, Daniel, Natan and Yael; to Tsonka, Konstatin and Marek; and to the Memory of Feliks, Maria, and Dentcho.
References
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Book ChapterDOI
Prospect theory: an analysis of decision under risk
Daniel Kahneman,Amos Tversky +1 more
TL;DR: In this paper, the authors present a critique of expected utility theory as a descriptive model of decision making under risk, and develop an alternative model, called prospect theory, in which value is assigned to gains and losses rather than to final assets and in which probabilities are replaced by decision weights.
Journal ArticleDOI
Prospect theory: analysis of decision under risk
Daniel Kahneman,Amos Tversky +1 more
Book
Theory of Games and Economic Behavior
TL;DR: Theory of games and economic behavior as mentioned in this paper is the classic work upon which modern-day game theory is based, and it has been widely used to analyze a host of real-world phenomena from arms races to optimal policy choices of presidential candidates, from vaccination policy to major league baseball salary negotiations.
Journal ArticleDOI
Le comportement de l'homme rationnel devant le risque : critique des postulats et axiomes de l'ecole americaine
Journal ArticleDOI
The Utility Analysis of Choices Involving Risk
TL;DR: In this paper, the authors suggest that an important class of reactions of individuals to risk can be rationalized by a rather simple extension of orthodox utility analysis, i.e., individuals frequently must, or can, choose among alternatives that differ, among other things, in the degree of risk to which the individual will be subject.