Uncertainty and Risk

by Abdellaoui, Mohammed; Luce, R. Duncan; Machina, Mark J.; Munier, Bertrand

• ISBN13: 9783540489344
• ISBN10: 3540489347
• Format: Hardcover
• Copyright: 2007-08-03
• Publisher: Springer Verlag

Summary

We all feel that our world is fundamentally uncertain. But less unanimity emerges as to what we mean by "uncertainty" and how we ought to adjust. Businessmen tend to be "cautious" and engineers to pick up the "right" decision criteria among the many available in the literature, without having much justification about their respective behaviors. This book tries to sort out the different meanings of uncertainty and to discover their foundations. It shows that uncertainty can be represented using various tools and mental guidelines. Some decision criteria are then related to each case and assessed. Alternative ways to deal with risk - and risk attitude concepts - are then examined in the above perspective. Behavior under uncertainty emerges from this book as something to base more on inquiry and reflection than on mere intuition.

Table of Contents

Introduction	p. 1
Foundations
Conjectures, Refutations and Discoveries: Incorporating New Knowledge in Models of Belief and Choice Under Uncertainty	p. 9
When an Event Makes a Difference	p. 27
Countable Additivity and the Foundations of Bayesian Statistics	p. 33
On the Quantification and Decomposition of Uncertainty	p. 41
The Importance of Representational Tools in Understanding Behaviour Under Uncertainty and Risk
Preference for Diversification with Similarity Considerations	p. 63
Uncertainty Improves the Second-Best	p. 85
Lorenz Meets Rating but Misses Valuation	p. 101
A Deeper Look at Hyperbolic Discounting	p. 125
The Assessment of Several Alternative Decision Rules
"Take-the-Best" and Other Simple Strategies: Why and When They Work "Well" with Binary Cues	p. 153
On Generalized Secretary Problems	p. 187
Voting on Alternatives or on Criteria? The Meta-Decision on Group Decision Procedures	p. 207
Models of Risk Attitude Modelling and Methodological Issues
Probabilistic Risk Analysis Versus Decision Analysis: Similarities, Differences and Illustrations	p. 223
A Conjoint Measurement Based Rationale for Inducing Preferences	p. 243
Active Search for Probability Information and Recall Performance: Is Probability an Outstanding Element in the Mental Representation of Risky Decisions?	p. 261
Evolutionary Analysis of Risk Attitudes in Competitive Bidding Environments Using Simulation	p. 275
Behavior in Risky Decisions: Focus on Risk Defusing	p. 291
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