Uncertainty and Risk

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.

Research on decision criteria in economics, with particular emphasis on the representations of uncertainty New insights into behavior under uncertainty: based on inquiry and reflection rather than intuition Includes supplementary material: sn.pub/extras

Résumé

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. Coverage also examines alternative ways to deal with risk and risk attitude concepts. Behavior under uncertainty emerges from this book as something to base more on inquiry and reflection rather than on mere intuition.

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