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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.

Suggested Citation

  • Fioretti, Guido, 2009. "Either, Or. Exploration of an Emerging Decision Theory," MPRA Paper 12897, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:12897
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    File URL: https://mpra.ub.uni-muenchen.de/12897/1/MPRA_paper_12897.pdf
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    References listed on IDEAS

    as
    1. Gilboa Itzhak & Schmeidler David, 1993. "Updating Ambiguous Beliefs," Journal of Economic Theory, Elsevier, vol. 59(1), pages 33-49, February.
    2. 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.
    3. Guido Fioretti, 2004. "Evidence Theory: A Mathematical Framework For Unpredictable Hypotheses," Metroeconomica, Wiley Blackwell, vol. 55(4), pages 345-366, November.
    4. 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.
    5. Loomes, Graham & Sugden, Robert, 1983. "A Rationale for Preference Reversal," American Economic Review, American Economic Association, vol. 73(3), pages 428-432, June.
    6. Guido Fioretti, 2001. "A mathematical theory of evidence for G.L.S. Shackle," Mind & Society: Cognitive Studies in Economics and Social Sciences, Springer;Fondazione Rosselli, vol. 2(1), pages 77-98, March.
    7. Tversky, Amos & Thaler, Richard H, 1990. "Anomalies: Preference Reversals," Journal of Economic Perspectives, American Economic Association, vol. 4(2), pages 201-211, Spring.
    8. Malhotra, Naresh K, 1982. " Information Load and Consumer Decision Making," Journal of Consumer Research, Oxford University Press, vol. 8(4), pages 419-430, March.
    9. 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.
    10. Gilboa, Itzhak, 1987. "Expected utility with purely subjective non-additive probabilities," Journal of Mathematical Economics, Elsevier, vol. 16(1), pages 65-88, February.
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    12. Karni, Edi & Safra, Zvi, 1987. ""Preference Reversal' and the Observability of Preferences by Experimental Methods," Econometrica, Econometric Society, vol. 55(3), pages 675-685, May.
    13. 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.
    14. Guido Fioretti, 2009. "Evidence Theory As A Procedure For Handling Novel Events," Metroeconomica, Wiley Blackwell, vol. 60(2), pages 283-301, May.
    15. Phillips, Fred, 2002. "The distortion of criteria after decision-making," Organizational Behavior and Human Decision Processes, Elsevier, vol. 88(2), pages 769-784, July.
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    More about this item

    Keywords

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

    JEL classification:

    • D89 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Other
    • D80 - Microeconomics - - Information, Knowledge, and Uncertainty - - - General

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