Uncertainty and risk: Mental, formal, experimental representations

Cover......Page 1
Uncertainty and Risk - Mental, Formal, Experimental Representations......Page 3
ISBN 9783540489344......Page 4
Contents......Page 6
Introduction......Page 8
Part I Foundations......Page 14
1 Conjectures, Refutations and Discoveries: Incorporating New Knowledge in Models of Belief and Decision under Uncertainty......Page 16
2 Epistemology......Page 17
3 Example......Page 19
4 Propositions......Page 21
5 Logical Operations from the External Viewpoint......Page 25
6 The Decision-Maker s Viewpoint......Page 27
7 Changes in Knowledge......Page 28
8 Inference, Conjecture and Refutation......Page 30
References......Page 31
1 Introduction......Page 34
2 MainResult......Page 35
3 Application: MEU Preferences and Lower Probabilities......Page 37
References......Page 38
1 Introduction......Page 40
2 A Simple Model of a Bayesian Statistician......Page 41
3 AnExample......Page 44
4 Conclusions......Page 45
References......Page 46
1 Introduction......Page 48
2 Uncertainty Quantification......Page 51
3 Variance Decomposition and Global Importance......Page 54
4 An Illustrative Example......Page 57
5 Case Study Application: Conflict-of-Interest Uncertainty Analysis......Page 59
6 Conclusions......Page 63
References......Page 64
Part II TheImportanceofRepresentationalTools in Understanding Behaviour Under Uncertainty and Risk......Page 68
1 Introduction......Page 70
2 The Model......Page 72
3 Preference for Diversification with a Convex Similarity Function......Page 74
4 The Case of Concave Similarity Function......Page 77
5 Conclusion......Page 78
A Appendix......Page 80
References......Page 89
1 Introduction......Page 92
2 The Individual Insurance Problem......Page 94
3 Equilibrium in Competitive Insurance Markets......Page 101
4 Conclusion......Page 105
References......Page 106
1 Introduction......Page 108
2 TheExperiment......Page 109
3 Results......Page 115
4 Conclusion......Page 122
References......Page 124
BNotes......Page 125
1 Introduction......Page 132
2 TheExperiment......Page 135
3 Aggregate Results......Page 137
4 Choice Patterns......Page 139
5 Distributions of Choice Patterns......Page 143
6 Regression Analysis of the Probability of Choosing Later Options......Page 144
References......Page 152
A Appendix I: Questionnaires......Page 153
B Appendix II: De“nitions of Choice Patterns......Page 155
Part III The Assessment of Several Alternative Decision Rules......Page 158
1  Take-the-BestŽ and Other Simple Strategies: Why and When They Work  WellŽ with Binary Cues......Page 160
2 The Di erent Models......Page 163
4 Non-Compensatory and Compensatory Functions......Page 165
5 Di erent Cue Environments......Page 166
6 Error in the Application of Models......Page 171
7 Di erent Distributions of Cue Pro“les......Page 175
8 Approximating the E ects of Error in the Data......Page 180
9 Discussion......Page 182
References......Page 186
Appendix … The 5-Cue Case......Page 187
1 Introduction and Overview......Page 194
2 Secretary Problems......Page 195
3 A Stochastic Model of Choice in Secretary Problems......Page 198
References......Page 210
1 Introduction......Page 214
2 The Principal Decision Setting......Page 216
3 A Group Welfare Measure......Page 219
4 Analysis of Simulation Results......Page 221
5 Conclusion and Recommendations......Page 224
References......Page 225
Part IV Models of Risk Attitude Modelling and Methodological Issues......Page 228
Probabilistic Risk Analysis Versus Decision Analysis: Similarities, Differences and Illustrations......Page 230
1 Risk Analysis Versus Decision Analysis: Basic Problem And Implications......Page 231
2 Fundamental Concepts of Probability and Uncertainty......Page 233
3 Probabilistic Risk Analysis and Decision Analysis: The Methods and the Processes......Page 235
4 Risk Analysis and Decision Analysis: Di erence and Similarities......Page 237
5 Illustrations: The Tiles of the NASA Shuttle and the Risks of a Terrorist Attack on the US......Page 242
6 Conclusions......Page 246
References......Page 247
1 Introduction......Page 250
2 Measurement Theoretic Background......Page 252
3 Training Procedure......Page 258
4 Empirical Test......Page 261
5 Discussion......Page 264
References......Page 266
1 Introduction......Page 268
2 Method......Page 270
3 Results......Page 273
4 Discussion......Page 277
References......Page 280
1 Introduction......Page 282
2 Evolution and Game Theory......Page 284
3 Evolution and Utility Functions......Page 285
6 The Scenario......Page 287
7 Conclusion......Page 291
A Appendix......Page 292
B Appendix......Page 293
References......Page 295
1 Introduction......Page 298
2 Peculiarities of Experiments with Gambles or Similarly Structured Tasks......Page 299
3 Are Subjective Probabilities and Subjective Values Central in all Risky Decision Situations?......Page 300
4 Risk Defusing in the Decision Process......Page 304
5 TypesofRDOs......Page 306
6 Discussion......Page 308
References......Page 311