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Affective decision making: A theory of optimism bias

  • Bracha, Anat
  • Brown, Donald J.
Registered author(s):

    Optimism bias is inconsistent with the independence of decision weights and payoffs found in models of choice under risk and uncertainty, such as expected utility theory, subjective expected utility, and prospect theory. We therefore propose an alternative model of risky and uncertain choice where decision weights—affective or perceived risk—are endogenous.

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    File URL: http://www.sciencedirect.com/science/article/pii/S0899825611001825
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    Article provided by Elsevier in its journal Games and Economic Behavior.

    Volume (Year): 75 (2012)
    Issue (Month): 1 ()
    Pages: 67-80

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    Handle: RePEc:eee:gamebe:v:75:y:2012:i:1:p:67-80
    Contact details of provider: Web page: http://www.elsevier.com/locate/inca/622836

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