The concept of a non-extreme-outcome-additive capacity (neo-additive capacity ) is introduced. Neo-additive capacities model optimistic and pessimistic attitudes towards uncertainty as observed in many experimental studies. Moreover, neo-additive capacities can be applied easily in economic problems, as we demonstrate by examples. This paper provides an axiomatisation of Choquet expected utility with neo-capacities in a framework of purely subjective uncertainty.
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Paper provided by Rice University, Department of Economics in its series Working Papers with number
2002-10.
Find related papers by JEL classification: D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty
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Ghirardato, Paolo & Maccheroni, Fabio & Marinacci, Massimo & Siniscalchi, Marciano, 2001.
"A Subjective Spin on Roulette Wheels,"
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1127, California Institute of Technology, Division of the Humanities and Social Sciences.
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Other versions:
Ghirardato, Paolo & Maccheroni, Fabio & Marinacci, Massimo, 2002.
"Ambiguity from the Differential Viewpoint,"
Working Papers
1130, California Institute of Technology, Division of the Humanities and Social Sciences.
[Downloadable!]
Cited by: (explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)
Jürgen Eichberger & David Kelsey & Burkhard C. Schipper, 2005.
"Ambiguity and Social Interaction,"
Discussion Papers
59, SFB/TR 15 Governance and the Efficiency of Economic Systems, Free University of Berlin, Humboldt University of Berlin, University of Bonn, University of Mannheim, University of Munich.
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Other versions:
Jürgen Eichberger & David Kelsey & Burkhard C. Schipper, 2007.
"Ambiguity and Social Interaction,"
Working Papers
0443, University of Heidelberg, Department of Economics, revised May 2007.
[Downloadable!]
Jürgen Eichberger & David Kelsey, 2007.
"Ambiguity,"
Working Papers
0448, University of Heidelberg, Department of Economics, revised Jul 2007.
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André de Palma & Moshe Ben-Akiva & David Brownstone & Charles Holt & Thierry Magnac & Daniel McFadden & Peter Moffatt & Nathalie Picard & Kenneth Train & Peter Wakker & Joan Walker, 2008.
"Risk, Uncertainty and Discrete Choice Models,"
THEMA Working Papers
2008-02, THEMA (THéorie Economique, Modélisation et Applications), Université de Cergy-Pontoise.
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Tigran Melkonyan & Mark Pingle, 2008.
"Ambiguity, Pessimism, and Religious Choice,"
Working Papers
08-002, University of Nevada, Reno, Department of Economics & University of Nevada, Reno , Department of Resource Economics.
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