IDEAS home Printed from https://ideas.repec.org/p/cda/wpaper/343.html
   My bibliography  Save this paper

Minimax regret with imperfect ex-post knowledge of the state

Author

Listed:
  • Giacomo Bonanno

    (Department of Economics, University of California Davis)

Abstract

We consider decision problems under complete ignorance and extend the minimax regret principle to situations where, after taking an action, the decision maker does not necessarily learn the state of the world. For example, if the decision maker only learns what the outcome is, then all she knows is that the actual state is one of the possibly several states that yield the observed outcome under the chosen action. We refer to this situation as imperfect ex-post information. We also extend the framework to encompass the possibility of less than the extreme pessimism that characterizes the minimax regret criterion.

Suggested Citation

  • Giacomo Bonanno, 2021. "Minimax regret with imperfect ex-post knowledge of the state," Working Papers 343, University of California, Davis, Department of Economics.
  • Handle: RePEc:cda:wpaper:343
    as

    Download full text from publisher

    File URL: https://repec.dss.ucdavis.edu/files/BdYMgsQmmt3Xi78j8ubveQKj/Regret.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Stoye, Jörg, 2011. "Axioms for minimax regret choice correspondences," Journal of Economic Theory, Elsevier, vol. 146(6), pages 2226-2251.
    2. David E. Bell, 1982. "Regret in Decision Making under Uncertainty," Operations Research, INFORMS, vol. 30(5), pages 961-981, October.
    3. Sugden Robert, 1993. "An Axiomatic Foundation for Regret Theory," Journal of Economic Theory, Elsevier, vol. 60(1), pages 159-180, June.
    4. Hayashi, Takashi, 2008. "Regret aversion and opportunity dependence," Journal of Economic Theory, Elsevier, vol. 139(1), pages 242-268, March.
    5. Zeelenberg, Marcel & Beattie, Jane, 1997. "Consequences of Regret Aversion 2: Additional Evidence for Effects of Feedback on Decision Making," Organizational Behavior and Human Decision Processes, Elsevier, vol. 72(1), pages 63-78, October.
    6. Larrick, Richard P. & Boles, Terry L., 1995. "Avoiding Regret in Decisions with Feedback: A Negotiation Example," Organizational Behavior and Human Decision Processes, Elsevier, vol. 63(1), pages 87-97, July.
    7. Loomes, Graham & Sugden, Robert, 1982. "Regret Theory: An Alternative Theory of Rational Choice under Uncertainty," Economic Journal, Royal Economic Society, vol. 92(368), pages 805-824, December.
    8. Ritov, Ilana, 1996. "Probability of Regret: Anticipation of Uncertainty Resolution in Choice," Organizational Behavior and Human Decision Processes, Elsevier, vol. 66(2), pages 228-236, May.
    9. Humphrey, Steven J., 2004. "Feedback-conditional regret theory and testing regret-aversion in risky choice," Journal of Economic Psychology, Elsevier, vol. 25(6), pages 839-857, December.
    10. Clemens Puppe & Karl Schlag, 2009. "Choice under complete uncertainty when outcome spaces are state dependent," Theory and Decision, Springer, vol. 66(1), pages 1-16, January.
    11. Diecidue, Enrico & Somasundaram, Jeeva, 2017. "Regret theory: A new foundation," Journal of Economic Theory, Elsevier, vol. 172(C), pages 88-119.
    12. Mary Acker, 1997. "Tempered Regrets Under Total Ignorance," Theory and Decision, Springer, vol. 42(3), pages 207-213, May.
    13. Zeelenberg, Marcel & Beattie, Jane & van der Pligt, Joop & de Vries, Nanne K., 1996. "Consequences of Regret Aversion: Effects of Expected Feedback on Risky Decision Making," Organizational Behavior and Human Decision Processes, Elsevier, vol. 65(2), pages 148-158, February.
    14. Han Bleichrodt & Peter P. Wakker, 2015. "Regret Theory: A Bold Alternative to the Alternatives," Economic Journal, Royal Economic Society, vol. 0(583), pages 493-532, March.
    15. Loomes, Graham & Sugden, Robert, 1987. "Some implications of a more general form of regret theory," Journal of Economic Theory, Elsevier, vol. 41(2), pages 270-287, April.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Qu, Yi & Khan, Jashim & Su, Yuyang & Tong, Jiao & Zhao, Shuo, 2023. "Impulse buying tendency in live-stream commerce: The role of viewing frequency and anticipated emotions influencing scarcity-induced purchase decision," Journal of Retailing and Consumer Services, Elsevier, vol. 75(C).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Herweg, Fabian & Müller, Daniel, 2021. "A comparison of regret theory and salience theory for decisions under risk," Journal of Economic Theory, Elsevier, vol. 193(C).
    2. Gabillon, Emmanuelle, 2020. "When choosing is painful: Anticipated regret and psychological opportunity cost," Journal of Economic Behavior & Organization, Elsevier, vol. 178(C), pages 644-659.
    3. Emmanuelle GABILLON, 2020. "When choosing is painful: anticipated regret and psychological opportunity cost," Bordeaux Economics Working Papers 2020-04, Bordeaux School of Economics (BSE).
    4. Emmanuelle Gabillon, 2022. "Regret aversion and information aversion," Working Papers hal-03898012, HAL.
    5. Jeeva Somasundaram & Enrico Diecidue, 2017. "Regret theory and risk attitudes," Journal of Risk and Uncertainty, Springer, vol. 55(2), pages 147-175, December.
    6. Emmanuelle GABILLON, 2022. "Regret aversion and information aversion," Bordeaux Economics Working Papers 2022-12, Bordeaux School of Economics (BSE).
    7. Krähmer, Daniel & Stone, Rebecca, 2005. "Regret in Dynamic Decision Problems," Discussion Paper Series of SFB/TR 15 Governance and the Efficiency of Economic Systems 71, Free University of Berlin, Humboldt University of Berlin, University of Bonn, University of Mannheim, University of Munich.
    8. Diecidue, Enrico & Somasundaram, Jeeva, 2017. "Regret theory: A new foundation," Journal of Economic Theory, Elsevier, vol. 172(C), pages 88-119.
    9. Sugden, Robert & Wang, Mengjie & Zizzo, Daniel John, 2019. "Take it or leave it: Experimental evidence on the effect of time-limited offers on consumer behaviour," Journal of Economic Behavior & Organization, Elsevier, vol. 168(C), pages 1-23.
    10. Buturak, Gökhan & Evren, Özgür, 2017. "Choice overload and asymmetric regret," Theoretical Economics, Econometric Society, vol. 12(3), September.
    11. Daniele Pennesi, 2021. "Between Commitment and Flexibility: Revealing Anticipated Regret and Elation," Working papers 071, Department of Economics, Social Studies, Applied Mathematics and Statistics (Dipartimento di Scienze Economico-Sociali e Matematico-Statistiche), University of Torino.
    12. Zeelenberg, M. & van Dijk, W.W. & Manstead, A.S.R., 1998. "Reconsidering the relation between regret and responsibility," Other publications TiSEM fa17bcac-aab0-4f37-8183-5, Tilburg University, School of Economics and Management.
    13. Zheng, Jiakun, 2021. "Willingness to pay for reductions in health risks under anticipated regret," Journal of Health Economics, Elsevier, vol. 78(C).
    14. Zeelenberg, Marcel & van Dijk, Wilco W. & van der Pligt, Joop & Manstead, Antony S. R. & van Empelen, Pepijn & Reinderman, Dimitri, 1998. "Emotional Reactions to the Outcomes of Decisions: The Role of Counterfactual Thought in the Experience of Regret and Disappointment," Organizational Behavior and Human Decision Processes, Elsevier, vol. 75(2), pages 117-141, August.
    15. Han Bleichrodt & Peter P. Wakker, 2015. "Regret Theory: A Bold Alternative to the Alternatives," Economic Journal, Royal Economic Society, vol. 0(583), pages 493-532, March.
    16. Jiakun Zheng, 2021. "Willingness to pay for reductions in health risks under anticipated regret," Post-Print hal-04227414, HAL.
    17. Zeelenberg, Marcel & van Dijk, Wilco W. & Manstead, Antony S. R., 1998. "Reconsidering the Relation between Regret and Responsibility," Organizational Behavior and Human Decision Processes, Elsevier, vol. 74(3), pages 254-272, June.
    18. Zeelenberg, M. & van Dijk, W.W. & van der Pligt, J. & Manstead, A.S.R. & van Empelen, P. & Reinderman, D., 1998. "Emotional reactions to the outcomes of decision : The role of counterfactual thought in the experience of regret," Other publications TiSEM eafc28f9-18d6-4b76-b70f-3, Tilburg University, School of Economics and Management.
    19. Zeelenberg, Marcel & Pieters, Rik, 2004. "Consequences of regret aversion in real life: The case of the Dutch postcode lottery," Organizational Behavior and Human Decision Processes, Elsevier, vol. 93(2), pages 155-168, March.
    20. Yoichiro Fujii & Hajime Murakami & Yutaka Nakamura & Kazuhisa Takemura, 2023. "Multiattribute regret: theory and experimental study," Theory and Decision, Springer, vol. 95(4), pages 623-662, November.

    More about this item

    Keywords

    Regret; minimax; pessimism; Hurwicz index;
    All these keywords.

    JEL classification:

    • C0 - Mathematical and Quantitative Methods - - General
    • D0 - Microeconomics - - General

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:cda:wpaper:343. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Letters and Science IT Services Unit (email available below). General contact details of provider: https://edirc.repec.org/data/educdus.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.