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Either, Or. Exploration of an Emerging Decision Theory

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  • Fioretti, Guido

Abstract

A novel decision theory is emerging out of sparse findings in economics, mathematics and, most importantly, psychology and computational cognitive science. It rejects a fundamental assumption of the theory of rational decision-making, namely, that uncertain belief rests on independent assessment of utility and probability, and includes envisioning possibilities within its scope. Several researchers working with these premises, independently of one another, arrived at the conclusion that decision is made by highlighting the positive features of the alternative that will be chosen while opposing it to a loosing alternative, whose unpleasant aspects have been stressed. This article frames together contributions from different disciplines, often unknown to one another, with the hope of improving the coordination of research efforts. Furthermore, it discusses the status of the novel theory with respect to our current idea of rationality.

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Bibliographic Info

Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 12897.

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Date of creation: 09 Mar 2009
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Handle: RePEc:pra:mprapa:12897

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Related research

Keywords: Rationality; Shackle; Shafer; Search for Dominant Structure; Differentiation -- Consolidation; Constraint Satisfaction Networks; Construction of Narratives;

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  1. Simonson, Itamar, 1989. " Choice Based on Reasons: The Case of Attraction and Compromise Effects," Journal of Consumer Research, University of Chicago Press, vol. 16(2), pages 158-74, September.
  2. Phillips, Fred, 2002. "The distortion of criteria after decision-making," Organizational Behavior and Human Decision Processes, Elsevier, vol. 88(2), pages 769-784, July.
  3. Levi, Ariel S. & Pryor, John B., 1987. "Use of the availability heuristic in probability estimates of future events: The effects of imagining outcomes versus imagining reasons," Organizational Behavior and Human Decision Processes, Elsevier, vol. 40(2), pages 219-234, October.
  4. Tversky, Amos & Thaler, Richard H, 1990. "Anomalies: Preference Reversals," Journal of Economic Perspectives, American Economic Association, vol. 4(2), pages 201-11, Spring.
  5. Malhotra, Naresh K, 1982. " Information Load and Consumer Decision Making," Journal of Consumer Research, University of Chicago Press, vol. 8(4), pages 419-30, March.
  6. Schmeidler, David, 1989. "Subjective Probability and Expected Utility without Additivity," Econometrica, Econometric Society, vol. 57(3), pages 571-87, May.
  7. Ariely, Dan & Loewenstein, George & Prelec, Drazen, 2006. "Tom Sawyer and the construction of value," Journal of Economic Behavior & Organization, Elsevier, vol. 60(1), pages 1-10, May.
  8. Guido Fioretti, 2002. "Evidence Theory: A Mathematical Framework for Unpredictable Hypotheses," Experimental 0207001, EconWPA.
  9. Guido Fioretti, 2001. "A mathematical theory of evidence for G.L.S. Shackle," ICER Working Papers 03-2001, ICER - International Centre for Economic Research.
  10. Tyszka, Tadeusz, 1998. "Two Pairs of Conflicting Motives in Decision Making," Organizational Behavior and Human Decision Processes, Elsevier, vol. 74(3), pages 189-211, June.
  11. Gilboa, Itzhak, 1987. "Expected utility with purely subjective non-additive probabilities," Journal of Mathematical Economics, Elsevier, vol. 16(1), pages 65-88, February.
  12. Karni, Edi & Safra, Zvi, 1987. ""Preference Reversal' and the Observability of Preferences by Experimental Methods," Econometrica, Econometric Society, vol. 55(3), pages 675-85, May.
  13. Gilboa Itzhak & Schmeidler David, 1993. "Updating Ambiguous Beliefs," Journal of Economic Theory, Elsevier, vol. 59(1), pages 33-49, February.
  14. Guido Fioretti, 2009. "Evidence Theory As A Procedure For Handling Novel Events," Metroeconomica, Wiley Blackwell, vol. 60(2), pages 283-301, 05.
  15. Loomes, Graham & Sugden, Robert, 1983. "A Rationale for Preference Reversal," American Economic Review, American Economic Association, vol. 73(3), pages 428-32, June.
  16. Tversky, Amos & Kahneman, Daniel, 1992. " Advances in Prospect Theory: Cumulative Representation of Uncertainty," Journal of Risk and Uncertainty, Springer, vol. 5(4), pages 297-323, October.
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