Risk, Decision and Rationality

Decision Theory has considerably developed in the late 1970's and the 1980's. The evolution has been so fast and far-r2aching that it has become increasingly difficult to keep track of the new state of the art. After a decade of new contributions, there was a need for an overview' of the field. This book is intended to fill the gap. The reader will find here thirty~nine selected papers which were given at FUR-III, the third international confe­ rence on the Foundations and applications of Utility, Risk and decision theories, held in Aix-en-Provence in June 1986. An introductory chapter will provide an overview of the main questions raised on the subject since the 17th Century and more particularly so in the last thirty years, as well as some elementary information on the experimental and theoretical results obtained. It is thus hoped that any reader with some basic background in either Economics, Hanagement or Operations Research will be able to read profitably the thirty-nine other chapters. Psychologists, Sociologists, Social Philosophers and other specialists of the social sciences will also read this book with interest, as will high-level practitioners of decision~making and advanced students in one of the abovementioned fields. An expository survey of this volume will be found at the end of the introductory chapter, so that any of the seven parts of the book can be put by the reader in due perspective.

Contenu

A Guide to Decision-Making Under Uncertainty.- I / Concepts and Experiments in Utility Evaluation.- Different Experimental Procedures for Obtaining Valuations of Risky Actions: Implications for Utility Theory.- Investigating Utility and Value Functions with an "Assessment Cube".- Evaluation Questions and Income Utility.- Cardinal Utility: An Empirical Test.- A Note on the Relationships Between Utility and Value Functions.- Expected Utility Theory without Continuous Preferences.- Assessing Other People's Utilities.- A Comment on Pr. HARSANYI's "Assessing Other People's Utilities".- II / Experimental Investigations and the Expected Utility Hypotheses.- Experimental Investigations into Economic Behaviour Under Uncertainty.- "Preference Reversals" and the Theory of Decision Making under Risk.- Preponderence of the Certainty Effect Over Probability Distortion in Decision Making Under Risk.- A Model of the Influence of Certainty and Probability "Effects" on the Measurement of Utility.- III / Criticisms of Expected Utility Theory and Alternative Models.- Expected Utility Theory and Ordinalism. A Political Marriage.- The Bayesian Approach: Irreconciliable With Expected Utility Theory?.- The General Theory of Random Choices in Relation to the Invariant Cardinal Utility Function and the Specific Probability Function. The (U, ?) - Model: A General Overview.- A Large Scale Empirical Test for the Linearized Moments Model (LMM): Compatibility Between Theory and Observation.- An Axiomatic Model of Choice Under Risk Which is Compatible With the Certainty Effect.- Decision Making Under Ambiguity: A Note.- IV / The Unsolved Plurality of Models.- Cardinal Properties of "Local Utility Functions".- A New Neo-Bernoullian Theory: The Machina Theory. A Critical Analysis.- Economics as Psychology: A Cognitive Assay of the French and American Schools of Risk Theory.- V / Rationality and the Logic of Decision.- A Generalisation of Rational Behaviour.- Infinite Regressions in the Optimizing Theory of Decision.- Rational Behaviour and Adaptation.- Metatickles, Ratificationism, and Newcomb-Like Problems Without Dominance.- Consequentialism and the Independence Axiom.- Dynamic Choice and Rationality.- World Bayesianism: Comments on the Hammond/McClennen Debate.- VI / Modeling and Measuring Uncertainty.- Probability in Quantum Mechanics and in Utility Theory.- Some Remarkable Properties of the Determination of a Bounded Continuous Distribution by its Moments.- On ?-Additive Priors, ?-Coherence, and the Existence of Posteriors.- A New Dichotomization for Uncertainty Models.- Risk and Flexibility in Microeconomic Production Theory: Principles and Application to Energy-Saving Investments.- Possibility Theory: Searching for Normative Foundations.- Uncertainty Aversion and Risk Aversion in Models With Non-Additive Probabilities.- A Generalized Measure of Risk Aversion, Without the Independence Axiom.- VII / Some Applications.- The Income-Replacement Ratio: An Insurance Theory Approach.- Industrial Practice of Decision Theory.- The Expected Utility Applied to Reinsurance.