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Author: Michał Wiktor Krawczyk
Publisher: Rozenberg Publishers
Published: 2009
Total Pages: 171
ISBN-13: 903610145X
DOWNLOAD EBOOKDownload or read book Experiments in decision-making under Risk written by Michał Wiktor Krawczyk and published by Rozenberg Publishers. This book was released on 2009 with total page 171 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Author: P.J.H. Schoemaker
Publisher: Springer Science & Business Media
Published: 2013-11-11
Total Pages: 228
ISBN-13: 9401750408
DOWNLOAD EBOOKIn this valuable book, Paul Schoemaker summarizes recent experimental and field research that he and others have undertaken regarding the descrip tive validity of expected utility theory as a model of choice under uncer tainty. His principal message is that this paradigm is too narrow in its con ception and misses some of the important elements of a descriptive model of individual choice. In particular, Schoemaker calls attention to the impor tance of individual differences, task effects, and context effects as they influence behavior. The expected utility hypothesis has come under scrutiny in recent years from a number of different quarters. This book brings together these many studies and relates them to the large body of literature on individual de cision making under risk. Although this paradigm may be appropriate for describing behavior under many conditions of uncertainty, Schoemaker presents convincing evidence that it does not do well with respect to protec tion against low-probability events. For example, he shows that the insur ance purchase decision is influenced by the way information is presented to the client, as well as by the statistical knowledge of the respondents.
Download or read book Experiments on Decisions under Risk: The Expected Utility Hypothesis written by P.J.H. Schoemaker and published by Springer Science & Business Media. This book was released on 2013-11-11 with total page 228 pages. Available in PDF, EPUB and Kindle. Book excerpt: In this valuable book, Paul Schoemaker summarizes recent experimental and field research that he and others have undertaken regarding the descrip tive validity of expected utility theory as a model of choice under uncer tainty. His principal message is that this paradigm is too narrow in its con ception and misses some of the important elements of a descriptive model of individual choice. In particular, Schoemaker calls attention to the impor tance of individual differences, task effects, and context effects as they influence behavior. The expected utility hypothesis has come under scrutiny in recent years from a number of different quarters. This book brings together these many studies and relates them to the large body of literature on individual de cision making under risk. Although this paradigm may be appropriate for describing behavior under many conditions of uncertainty, Schoemaker presents convincing evidence that it does not do well with respect to protec tion against low-probability events. For example, he shows that the insur ance purchase decision is influenced by the way information is presented to the client, as well as by the statistical knowledge of the respondents.
Download or read book Experiments on Decision-making Under Risk written by Wenting Zhou and published by . This book was released on 2015 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt:
Author: Yaroslav Rosokha
Publisher:
Published: 2013
Total Pages: 258
ISBN-13:
DOWNLOAD EBOOKThis dissertation consists of three economic experiments that investigate behavioral differences in decision making process under risk (uncertainty with known probabilities) and under ambiguity (uncertainty with unknown probabilities). The first and the second chapters present two experiments with subjects choosing between lotteries involving risky and ambiguous urns. Decisions are made in conjunction with a sequence of random draws with replacement, allowing us to track the beliefs of the agents at different moments in time. In the first chapter, we develop and estimate a model of subjective belief updating allowing for base rate fallacy. We find that when updating under ambiguity subjects significantly underweight the new signal, while when updating under compound risk subjects are essentially Bayesian. In the second chapter, we estimate a popular multiple priors model for decision making under ambiguity in dynamic environments. Our estimates suggest a difference in the confidence with which subjects discard the unlikely priors depending on whether an ambiguous urn was presented first or second. Specifically, when an ambiguous urn is presented first, subjects consider more priors during the learning process as compared to when a compound urn is presented first. We also find significant evidence against the hypothesis that human subjects consider only Dirac priors. In the third chapter, we examine the behavior of security dealers in an environment where the level of asymmetric information is viewed as either risk, compound risk, or ambiguity. Using two measures of market liquidity, resiliency and price, we find that duopoly dealer markets are both more resilient to uncertainty about asymmetric information as well as having higher dealer bids compared with monopoly dealer markets for all three uncertainty scenarios. Additionally, we find differences in dealer bidding behavior in duopoly setting depending on whether the uncertainty about informed trading is presented as risk, compound risk, or ambiguity.
Download or read book Three Experiments on Decision-making Under Uncertainty in Dynamic Environments written by Yaroslav Rosokha and published by . This book was released on 2013 with total page 258 pages. Available in PDF, EPUB and Kindle. Book excerpt: This dissertation consists of three economic experiments that investigate behavioral differences in decision making process under risk (uncertainty with known probabilities) and under ambiguity (uncertainty with unknown probabilities). The first and the second chapters present two experiments with subjects choosing between lotteries involving risky and ambiguous urns. Decisions are made in conjunction with a sequence of random draws with replacement, allowing us to track the beliefs of the agents at different moments in time. In the first chapter, we develop and estimate a model of subjective belief updating allowing for base rate fallacy. We find that when updating under ambiguity subjects significantly underweight the new signal, while when updating under compound risk subjects are essentially Bayesian. In the second chapter, we estimate a popular multiple priors model for decision making under ambiguity in dynamic environments. Our estimates suggest a difference in the confidence with which subjects discard the unlikely priors depending on whether an ambiguous urn was presented first or second. Specifically, when an ambiguous urn is presented first, subjects consider more priors during the learning process as compared to when a compound urn is presented first. We also find significant evidence against the hypothesis that human subjects consider only Dirac priors. In the third chapter, we examine the behavior of security dealers in an environment where the level of asymmetric information is viewed as either risk, compound risk, or ambiguity. Using two measures of market liquidity, resiliency and price, we find that duopoly dealer markets are both more resilient to uncertainty about asymmetric information as well as having higher dealer bids compared with monopoly dealer markets for all three uncertainty scenarios. Additionally, we find differences in dealer bidding behavior in duopoly setting depending on whether the uncertainty about informed trading is presented as risk, compound risk, or ambiguity.
Author: Mohammed Abdellaoui
Publisher: Springer Science & Business Media
Published: 2008-08-29
Total Pages: 245
ISBN-13: 3540684360
DOWNLOAD EBOOKWhether we like it or not we all feel that the world is uncertain. From choosing a new technology to selecting a job, we rarely know in advance what outcome will result from our decisions. Unfortunately, the standard theory of choice under uncertainty developed in the early forties and fifties turns out to be too rigid to take many tricky issues of choice under uncertainty into account. The good news is that we have now moved away from the early descriptively inadequate modeling of behavior. This book brings the reader into contact with the accomplished progress in individual decision making through the most recent contributions to uncertainty modeling and behavioral decision making. It also introduces the reader into the many subtle issues to be resolved for rational choice under uncertainty.
Download or read book Advances in Decision Making Under Risk and Uncertainty written by Mohammed Abdellaoui and published by Springer Science & Business Media. This book was released on 2008-08-29 with total page 245 pages. Available in PDF, EPUB and Kindle. Book excerpt: Whether we like it or not we all feel that the world is uncertain. From choosing a new technology to selecting a job, we rarely know in advance what outcome will result from our decisions. Unfortunately, the standard theory of choice under uncertainty developed in the early forties and fifties turns out to be too rigid to take many tricky issues of choice under uncertainty into account. The good news is that we have now moved away from the early descriptively inadequate modeling of behavior. This book brings the reader into contact with the accomplished progress in individual decision making through the most recent contributions to uncertainty modeling and behavioral decision making. It also introduces the reader into the many subtle issues to be resolved for rational choice under uncertainty.
Author: Bertrand Munier
Publisher: Springer Science & Business Media
Published: 2013-03-14
Total Pages: 443
ISBN-13: 9401722986
DOWNLOAD EBOOKModels and Experiments in Risk and Rationality presents original contributions to the areas of individual choice, experimental economics, operations and analysis, multiple criteria decision making, market uncertainty, game theory and social choice. The papers, which were presented at the FUR VI conference, are arranged to appear in order of increasing complexity of the decision environment or social context in which they situate themselves. The first section `Psychological Aspects of Risk-Bearing', considers choice at the purely individual level and for the most part, free of any specific economic or social context. The second section examines individual choice within the classical expected utility approach while the third section works from a perspective that includes non-expected utility preferences over lotteries. Section four, `Multiple Criteria Decision-Making Under Uncertainty', considers the more specialized but crucial context of uncertain choice involving tradeoffs between competing criteria -- a field which is becoming of increasing importance in applied decision analysis. The final two sections examine uncertain choice in social or group contexts.
Download or read book Models and Experiments in Risk and Rationality written by Bertrand Munier and published by Springer Science & Business Media. This book was released on 2013-03-14 with total page 443 pages. Available in PDF, EPUB and Kindle. Book excerpt: Models and Experiments in Risk and Rationality presents original contributions to the areas of individual choice, experimental economics, operations and analysis, multiple criteria decision making, market uncertainty, game theory and social choice. The papers, which were presented at the FUR VI conference, are arranged to appear in order of increasing complexity of the decision environment or social context in which they situate themselves. The first section `Psychological Aspects of Risk-Bearing', considers choice at the purely individual level and for the most part, free of any specific economic or social context. The second section examines individual choice within the classical expected utility approach while the third section works from a perspective that includes non-expected utility preferences over lotteries. Section four, `Multiple Criteria Decision-Making Under Uncertainty', considers the more specialized but crucial context of uncertain choice involving tradeoffs between competing criteria -- a field which is becoming of increasing importance in applied decision analysis. The final two sections examine uncertain choice in social or group contexts.
Author: Michael Luca
Publisher: MIT Press
Published: 2021-03-02
Total Pages: 229
ISBN-13: 0262542277
DOWNLOAD EBOOKHow tech companies like Google, Airbnb, StubHub, and Facebook learn from experiments in our data-driven world—an excellent primer on experimental and behavioral economics Have you logged into Facebook recently? Searched for something on Google? Chosen a movie on Netflix? If so, you've probably been an unwitting participant in a variety of experiments—also known as randomized controlled trials—designed to test the impact of different online experiences. Once an esoteric tool for academic research, the randomized controlled trial has gone mainstream. No tech company worth its salt (or its share price) would dare make major changes to its platform without first running experiments to understand how they would influence user behavior. In this book, Michael Luca and Max Bazerman explain the importance of experiments for decision making in a data-driven world. Luca and Bazerman describe the central role experiments play in the tech sector, drawing lessons and best practices from the experiences of such companies as StubHub, Alibaba, and Uber. Successful experiments can save companies money—eBay, for example, discovered how to cut $50 million from its yearly advertising budget—or bring to light something previously ignored, as when Airbnb was forced to confront rampant discrimination by its hosts. Moving beyond tech, Luca and Bazerman consider experimenting for the social good—different ways that governments are using experiments to influence or “nudge” behavior ranging from voter apathy to school absenteeism. Experiments, they argue, are part of any leader's toolkit. With this book, readers can become part of “the experimental revolution.”
Download or read book The Power of Experiments written by Michael Luca and published by MIT Press. This book was released on 2021-03-02 with total page 229 pages. Available in PDF, EPUB and Kindle. Book excerpt: How tech companies like Google, Airbnb, StubHub, and Facebook learn from experiments in our data-driven world—an excellent primer on experimental and behavioral economics Have you logged into Facebook recently? Searched for something on Google? Chosen a movie on Netflix? If so, you've probably been an unwitting participant in a variety of experiments—also known as randomized controlled trials—designed to test the impact of different online experiences. Once an esoteric tool for academic research, the randomized controlled trial has gone mainstream. No tech company worth its salt (or its share price) would dare make major changes to its platform without first running experiments to understand how they would influence user behavior. In this book, Michael Luca and Max Bazerman explain the importance of experiments for decision making in a data-driven world. Luca and Bazerman describe the central role experiments play in the tech sector, drawing lessons and best practices from the experiences of such companies as StubHub, Alibaba, and Uber. Successful experiments can save companies money—eBay, for example, discovered how to cut $50 million from its yearly advertising budget—or bring to light something previously ignored, as when Airbnb was forced to confront rampant discrimination by its hosts. Moving beyond tech, Luca and Bazerman consider experimenting for the social good—different ways that governments are using experiments to influence or “nudge” behavior ranging from voter apathy to school absenteeism. Experiments, they argue, are part of any leader's toolkit. With this book, readers can become part of “the experimental revolution.”
Author: J. Geweke
Publisher: Springer Science & Business Media
Published: 1992-08-31
Total Pages: 282
ISBN-13: 9780792319047
DOWNLOAD EBOOKAs desired, the infonnation demand correspondence is single valued at equilibrium prices. Hence no planner is needed to assign infonnation allocations to individuals. Proposition 4. For any given infonnation price system p E . P (F *), almost every a E A demands a unique combined infonnation structure (although traders may be indifferent among partial infonnation sales from different information allocations, etc. ). In particular, the aggregate excess demand correspondence for net combined infonnation trades is a continuous function. Proof Uniqueness fails only if an agent can obtain the same expected utility from two or more net combined infonnation allocations. If this happens, appropriate slight perturbations of personal probability vectors destroy the equality unless the utility functions and wealth allocations were independent across states. Yet, when utilities and wealths don't depend on states in S, no infonnation to distinguish the states is desired, so that the demand for such infonnation structures must equal zero. To show the second claim, recall that if the correspondence is single valued for almost every agent, then its integral is also single valued. Finally, note that an upper hemicontinuous (by Proposition 2) correspondence which is single valued everywhere is, in fact, a continuous function. [] REFERENCES Allen, Beth (1986a). "The Demand for (Differentiated) Infonnation"; Review of Economic Studies. 53. (311-323). Allen, Beth (1986b). "General Equilibrium with Infonnation Sales"; Theory and Decision. 21. (1-33). Allen, Beth (1990). "Infonnation as an Economic Commodity"; American Economic Review. 80. (268-273).
Download or read book Decision Making Under Risk and Uncertainty written by J. Geweke and published by Springer Science & Business Media. This book was released on 1992-08-31 with total page 282 pages. Available in PDF, EPUB and Kindle. Book excerpt: As desired, the infonnation demand correspondence is single valued at equilibrium prices. Hence no planner is needed to assign infonnation allocations to individuals. Proposition 4. For any given infonnation price system p E . P (F *), almost every a E A demands a unique combined infonnation structure (although traders may be indifferent among partial infonnation sales from different information allocations, etc. ). In particular, the aggregate excess demand correspondence for net combined infonnation trades is a continuous function. Proof Uniqueness fails only if an agent can obtain the same expected utility from two or more net combined infonnation allocations. If this happens, appropriate slight perturbations of personal probability vectors destroy the equality unless the utility functions and wealth allocations were independent across states. Yet, when utilities and wealths don't depend on states in S, no infonnation to distinguish the states is desired, so that the demand for such infonnation structures must equal zero. To show the second claim, recall that if the correspondence is single valued for almost every agent, then its integral is also single valued. Finally, note that an upper hemicontinuous (by Proposition 2) correspondence which is single valued everywhere is, in fact, a continuous function. [] REFERENCES Allen, Beth (1986a). "The Demand for (Differentiated) Infonnation"; Review of Economic Studies. 53. (311-323). Allen, Beth (1986b). "General Equilibrium with Infonnation Sales"; Theory and Decision. 21. (1-33). Allen, Beth (1990). "Infonnation as an Economic Commodity"; American Economic Review. 80. (268-273).
Author: Marcela Tarazona-Gomez
Publisher:
Published: 2007
Total Pages: 183
ISBN-13:
DOWNLOAD EBOOKUsing laboratory experiments as a tool, this dissertation contributes to the debate of decision making under risk three domains : The first essay presents the results of an experiment that elicits prudence and risk aversion. We find that the majority of subjects are prudent and that a big proportion is simultaneously prudent and risk averse, even if we find no correlation between prudence and risk aversion. The second essay investigates the effect of uncertainty on the decision to finance a public good. Our theoretical prediction is that risk adverse individuals will reduce their contributions to the production of a public good when facing more uncertainty. Results reveal that this prediction is confirmed but only for economists, and that non economists rather increase their contributions. In the last essay we elicit individual preferences over social risk. We analyze if these preferences are correlated with individual preferences over individual risk and over the well-being of others. We find that social risk attitudes closely approximate individual risk attitudes.
Download or read book Decision-Making Under Risk written by Marcela Tarazona-Gomez and published by . This book was released on 2007 with total page 183 pages. Available in PDF, EPUB and Kindle. Book excerpt: Using laboratory experiments as a tool, this dissertation contributes to the debate of decision making under risk three domains : The first essay presents the results of an experiment that elicits prudence and risk aversion. We find that the majority of subjects are prudent and that a big proportion is simultaneously prudent and risk averse, even if we find no correlation between prudence and risk aversion. The second essay investigates the effect of uncertainty on the decision to finance a public good. Our theoretical prediction is that risk adverse individuals will reduce their contributions to the production of a public good when facing more uncertainty. Results reveal that this prediction is confirmed but only for economists, and that non economists rather increase their contributions. In the last essay we elicit individual preferences over social risk. We analyze if these preferences are correlated with individual preferences over individual risk and over the well-being of others. We find that social risk attitudes closely approximate individual risk attitudes.
Author: John Denis Hey
Publisher: Wiley-Blackwell
Published: 1991
Total Pages: 264
ISBN-13:
DOWNLOAD EBOOKAfter a discussion of the methodological issues involved in experimental economics, the author provides accounts of particular experimental investigations covering individual and interactive behaviour and testing game and bargaining theory, decision-making under uncertainty, auctions and markets.
Download or read book Experiments in Economics written by John Denis Hey and published by Wiley-Blackwell. This book was released on 1991 with total page 264 pages. Available in PDF, EPUB and Kindle. Book excerpt: After a discussion of the methodological issues involved in experimental economics, the author provides accounts of particular experimental investigations covering individual and interactive behaviour and testing game and bargaining theory, decision-making under uncertainty, auctions and markets.
