A Theory of Vague Expected Utility
We propose a new theory of choice between lotteries, which combines an 'economic’ view of decision making - based on a rational, though incomplete, ordering - with a 'psychological’ view - based on heuristics. This theory can explain observed violations of EU theory, namely all cyclical patterns of choice as well as violations of independence.
|Date of creation:||17 Apr 2003|
|Date of revision:||16 Jul 2004|
|Note:||Type of Document - pdf; prepared on IBM PC - PC-TEX; to print on HP; pages: 27; figures: included|
|Contact details of provider:|| Web page: http://econwpa.repec.org|
When requesting a correction, please mention this item's handle: RePEc:wpa:wuwpga:0304003. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (EconWPA)
If references are entirely missing, you can add them using this form.