ScholarLens Back to search
2013•Unpublished venueRequires access

AMBIGUITY AND NON-EXPECTED UTILITY

Edi Karni, Fabio Maccheroni, Mássimo Marinacci

Open publisher page 0 citations

Abstract

This chapter reviews developments in the theory of decision making under risk and uncertainty, focusing on models that, over the last 40 years, dominated the theoretical discussions. It also surveys some implications of the departures from the “linearity in the probabilities†aspect of expected utility theory to game theory. The chapter consists of two main parts: The first part reviews models of decision making under risk that depart from the independence axiom, focusing on the rank-dependent utility models and cumulative prospect theory. The second part reviews theories of decision making under uncertainty that depart from the sure thing principle and model the phenomenon of ambiguity and ambiguity aversion.

About this research paper

What this paper is about

This chapter reviews developments in the theory of decision making under risk and uncertainty, focusing on models that, over the last 40 years, dominated the theoretical discussions. It also surveys some implications of the departures from the “linearity in the probabilities†aspect of expected utility theory to game theory. The chapter consists of two main parts: The first part reviews models of decision making under risk that depart from the independence axiom, focusing on the rank-dependent utility models and cumulative prospect theory. The second part reviews theories of decision making under uncertainty that depart from the sure thing principle and model the phenomenon of ambiguity and ambiguity aversion.

Why it matters

A significance statement is not available in the OpenAlex record.

Key contribution

A contribution statement is not available in the OpenAlex record.

Method / approach

Method details are not available in the OpenAlex metadata.

Main findings

Findings are not separately available in the OpenAlex metadata.

Limitations

Limitations are not available in the OpenAlex metadata.

Applications

Application details are not available in the OpenAlex metadata.

Available abstract

This chapter reviews developments in the theory of decision making under risk and uncertainty, focusing on models that, over the last 40 years, dominated the theoretical discussions. It also surveys some implications of the departures from the “linearity in the probabilities†aspect of expected utility theory to game theory. The chapter consists of two main parts: The first part reviews models of decision making under risk that depart from the independence axiom, focusing on the rank-dependent utility models and cumulative prospect theory. The second part reviews theories of decision making under uncertainty that depart from the sure thing principle and model the phenomenon of ambiguity and ambiguity aversion.

Key concepts: Axiom independence, Ambiguity, Ambiguity aversion, Expected utility hypothesis, Cumulative prospect theory, Prospect theory, Axiom, Subjective expected utility

Related papers

Related paper 1Related paper 2Related paper 3
Back to paper searchBrowse research topicsOriginal source
AMBIGUITY AND NON-EXPECTED UTILITY — Research Paper | ScholarLens