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Case-Based Decision Theory

Author

Listed:
  • Itzhak Gilboa

    (Northwestern University [Evanston])

  • David Schmeidler

    (Tel Aviv University - Tel Aviv University, OSU - Ohio State University [Columbus])

Abstract

This paper suggests that decision-making under uncertainty is, at least partly, case-based. We propose a model in which cases are primitive, and provide a simple axiomatization of a decision rule that chooses a "best" act based on its past performance in similar cases. Each act is evaluated by the sum of the utility levels that resulted from using this act in past cases, each weighted by the similarity of that past case to the problem at hand. The formal model of case-based decision theory naturally gives rise to the notions of satisficing decisions and aspiration levels.

Suggested Citation

  • Itzhak Gilboa & David Schmeidler, 1995. "Case-Based Decision Theory," Post-Print hal-00753144, HAL.
  • Handle: RePEc:hal:journl:hal-00753144 DOI: 10.2307/2946694 Note: View the original document on HAL open archive server: https://hal-hec.archives-ouvertes.fr/hal-00753144
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    References listed on IDEAS

    as
    1. Avraham Beja & Itzhak Gilboa, 1989. "Numerical Representations of Imperfectly Ordered Preferences (A Unified Geometric Exposition," Discussion Papers 836, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
    2. Chateauneuf, Alain, 1987. "Continuous representation of a preference relation on a connected topological space," Journal of Mathematical Economics, Elsevier, vol. 16(2), pages 139-146, April.
    3. Yew-Kwang Ng, 1975. "Bentham or Bergson? Finite Sensibility, Utility Functions and Social Welfare Functions," Review of Economic Studies, Oxford University Press, vol. 42(4), pages 545-569.
    4. Quiggin, John, 1982. "A theory of anticipated utility," Journal of Economic Behavior & Organization, Elsevier, vol. 3(4), pages 323-343, December.
    5. John C. Harsanyi, 1955. "Cardinal Welfare, Individualistic Ethics, and Interpersonal Comparisons of Utility," Journal of Political Economy, University of Chicago Press, vol. 63, pages 309-309.
    6. Kahneman, Daniel & Tversky, Amos, 1979. "Prospect Theory: An Analysis of Decision under Risk," Econometrica, Econometric Society, vol. 47(2), pages 263-291, March.
    7. Gilboa, Itzhak, 1987. "Expected utility with purely subjective non-additive probabilities," Journal of Mathematical Economics, Elsevier, vol. 16(1), pages 65-88, February.
    8. Rubinstein, Ariel, 1988. "Similarity and decision-making under risk (is there a utility theory resolution to the Allais paradox?)," Journal of Economic Theory, Elsevier, vol. 46(1), pages 145-153, October.
    9. Gensemer, Susan H., 1987. "Continuous semiorder representations," Journal of Mathematical Economics, Elsevier, vol. 16(3), pages 275-289, June.
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    Keywords

    Case-Based Decision Theory;

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