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Can forbidden zones for the expectation explain noise influence in behavioral economics and decision sciences?

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  • Harin, Alexander

Abstract

The present article is devoted to discrete random variables that take a limited number of values in finite closed intervals. I prove that if non-zero lower bounds exist for the variances of the variables, then non-zero bounds or forbidden zones exist for their expectations near the boundaries of the intervals. This article is motivated by the need in rigorous theoretical support for the analysis of the influence of scattering and noise on data in behavioral economics and decision sciences.

Suggested Citation

  • Harin, Alexander, 2017. "Can forbidden zones for the expectation explain noise influence in behavioral economics and decision sciences?," MPRA Paper 76240, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:76240
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    File URL: https://mpra.ub.uni-muenchen.de/76240/1/MPRA_paper_76240.pdf
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    References listed on IDEAS

    as
    1. Alexander Harin, 2012. "Data Dispersion in Economics(II) - Inevitability and Consequences of Restrictions," Review of Economics & Finance, Better Advances Press, Canada, vol. 2, pages 24-36, November.
    2. Daniel Kahneman & Richard H. Thaler, 2006. "Anomalies: Utility Maximization and Experienced Utility," Journal of Economic Perspectives, American Economic Association, vol. 20(1), pages 221-234, Winter.
    3. Steftcho P. Dokov & David P. Morton, 2005. "Second-Order Lower Bounds on the Expectation of a Convex Function," Mathematics of Operations Research, INFORMS, vol. 30(3), pages 662-677, August.
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    Citations

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    Cited by:

    1. Harin, Alexander, 2018. "Forbidden zones for the expectation. New mathematical results for behavioral and social sciences," MPRA Paper 86650, University Library of Munich, Germany.
    2. Harin, Alexander, 2017. "Some estimations of the minimal magnitudes of forbidden zones in experimental data," MPRA Paper 80319, University Library of Munich, Germany.
    3. Harin, Alexander, 2018. "Forbidden zones and biases for the expectation of a random variable. Version 2," MPRA Paper 85607, University Library of Munich, Germany.
    4. Harin, Alexander, 2017. "Behavioral economics and auto-images of distributions of random variables," MPRA Paper 83025, University Library of Munich, Germany.
    5. Harin, Alexander, 2018. "Forbidden zones for the expectation of a random variable. New version 1," MPRA Paper 84248, University Library of Munich, Germany.
    6. Harin, Alexander, 2017. "About the minimal magnitudes of measurement’s forbidden zones. Version 1," MPRA Paper 78796, University Library of Munich, Germany.

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    More about this item

    Keywords

    probability; dispersion; variance; noise; economics; utility theory; prospect theory; behavioral economics; decision sciences;
    All these keywords.

    JEL classification:

    • C02 - Mathematical and Quantitative Methods - - General - - - Mathematical Economics
    • C1 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General
    • D8 - Microeconomics - - Information, Knowledge, and Uncertainty
    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty
    • D84 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Expectations; Speculations

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