Empirical rules of thumb for choice under uncertainty
AbstractA substantial body of empirical evidence shows that individuals overweight extreme events and act in conflict with the expected utility theory. These findings were the primary motivation behind the development of the rank-dependent utility theory. The purpose of this paper is to demonstrate that some plausible empirical rules of thumb for choice under uncertainty can be rationalized by the rank-dependent utility theory.
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Bibliographic InfoArticle provided by Springer in its journal Theory and Decision.
Volume (Year): 71 (2011)
Issue (Month): 3 (September)
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Web page: http://www.springerlink.com/link.asp?id=100341
Rank-dependent utility; Maximin; Maximax; Mid-range; D81;
Other versions of this item:
- Rolf Aaberge, 2002. "Empirical Rules of Thumb for Choice under Uncertainty," ICER Working Papers 22-2002, ICER - International Centre for Economic Research.
- D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty
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