Journal ArticleDOI
Estimation of indifference curves in the Marschak-Machina triangle a direct test of the “fanning out” hypothesis
John D. Hey,Elisabetta Strazzera +1 more
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In this paper, the authors adopt a more direct approach by estimating subjects' indifference maps in the Marschak-Machina Triangle, and find that most subjects have maps which are nearly consistent with those implied by Subjective Expected Utility theory.Abstract:
The ongoing debate on the correct modelling of economic behaviour under risk makes heavy expositional use of the 'Marschak-Machina Triangle'. This has also been used when constructing tests of the various competing theories. In this paper, we adopt a more direct approach - by estimating subjects' indifference maps in the Triangle. Employing an interview technique, we find that most subjects have maps which are nearly consistent with those implied by Subjective Expected Utility theory.read more
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Book ChapterDOI
Recent Tests of Generalizations of Expected Utility Theory
TL;DR: To accomodate patterns of preference that violate expected utility (EU), many theories have been developed in which the EU axioms are weakened or replaced All these theories were developed to explain the same small body of evidence (of which the Allais paradoxes are the most famous); new studies are needed to distinguish among the theories.
Journal ArticleDOI
Security level, potential level, expected utility: A three-criteria decision model under risk
TL;DR: In this paper, the authors construct an axiomatic model for subjects taking into account simultaneously or alternatively the security factor and the potential factor, which is then able to account for certain violations.
Journal ArticleDOI
A test of generalized expected utility theory
Barry Sopher,Gary Gigliotti +1 more
TL;DR: In two experiments as mentioned in this paper, the authors analyzed Fanning-out patterns of responses to hypothetical lottery choice questions within a Marschak-Machina triangle and found that a large proportion of the observed patterns in the on-border treatment support Hypothesis II, with a considerable amount of fanningout behavior observed.
Posted Content
Assessing farmers' attitudes toward risk using the "closing-in" method
Sharon K. Bard,Peter J. Barry +1 more
TL;DR: In this paper, a technique called the "closing-in" method is adapted for eliciting farmers' risk attitudes, applied to Illinois farmers by using a computerized decision procedure, and validated by comparing the results to the farmers' self-assessment of their risk attitudes and score to a risk attitudinal scale.
Journal ArticleDOI
The risk-structure dependence effect:Experimenting with an eye to decision-aiding
TL;DR: The results show that indifference curves clearly take quite different types of shape according to their location within the triangle, i.e. that preferences under risk fundamentallydepend on the risk-structure (as defined in the paper) faced by the decision maker.
References
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Journal ArticleDOI
Regret Theory: An Alternative Theory of Rational Choice Under Uncertainty
Graham Loomes,Robert Sugden +1 more
TL;DR: The main body of current economic analysis of choice under uncertainty is built upon a small number of basic axioms, formulated in slightly different ways by von Neumann and Morgenstern (I 947), Savage (1 954), and others.
Book ChapterDOI
Choice under Uncertainty: Problems Solved and Unsolved
TL;DR: The choice-under-uncertainty theory is a field in flux as mentioned in this paper and it is being challenged on several grounds from both within and outside economics, and the nature of these challenges, and of our profession's responses to them, is the topic of this paper.
Journal ArticleDOI
Nontransitive measurable utility.
TL;DR: In this paper, a new theory of preferences under risk is presented that does not use the transitivity and independence axioms of the von Neumann-Morgenstern linear utility theory.