게임설계 | Cases and Studies of Game Design in Lottery & Gambling | 游戏设计
- date : 2015-05-20 01:10|hit : 1701
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- Article] Preference under risk in the presence of indistinguishable probabilities
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DocNo of ILP: 386
Doc. Type: Article
Title: Preference under risk in the presence of indistinguishable probabilities
Authors: Lorentziadis, PL
Full Name of Authors: Lorentziadis, Panos L.
Keywords by Author: Expected utility; Indistinguishable probabilities; Probability weighting; Preference under risk; Similarity
Keywords Plus: DEPENDENT EXPECTED UTILITY; PROSPECT-THEORY; SIMILARITY JUDGMENTS; CARDINAL UTILITY; DECISION-MAKING; LOSS AVERSION; CHOICE; INTRANSITIVITY; CATEGORIZATION; UNCERTAINTY
Abstract: Indistinguishable probabilities are induced by the inability of decision makers to discriminate among probabilities which have similar values, as documented by experimental evidence. In the model of preference mechanism under risk that we examine, probabilities in each interval of a partition of [0,1] are assigned the same weight in the preference function. An axiomatic foundation, giving rise to a step-wise linear probability weighting transformation, is established. The model is consistent with classical violations of the expected utility theory. Our approach extends Rubinstein's similarity theory for multiple outcome lotteries and addresses the degeneracy of difference similarities. The model provides a simple formulation of just noticeable differences of probabilities. Preference in the presence of first-order stochastic dominance is discussed in the context of indistinguishable probabilities. Continuous probability weight transformation can be viewed as an approximation of our proposed weighting function. In this way, the model of indistinguishable probabilities develops a simple connection between two major theories of non-expected utility, namely prospect theory and similarity theory.
Cate of OECD: Economics and business
Year of Publication: 2013
Business Area: lottery
Detail Business: lottery
Country: Germany
Study Area: utility, utility, probabilityperspective theory, probability, perspective theory, preference, risk
Name of Journal: OPERATIONAL RESEARCH
Language: English
Country of Authors: Athens Univ Econ & Business, Dept Business Adm, Athens 14578, Greece
Press Adress: Lorentziadis, PL (reprint author), Athens Univ Econ & Business, Dept Business Adm, 10 Platanon St, Athens 14578, Greece.
Email Address: paloren@otenet.gr
Citaion:
Funding:
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Number of Citaion: 57
Publication: SPRINGER HEIDELBERG
City of Publication: HEIDELBERG
Address of Publication: TIERGARTENSTRASSE 17, D-69121 HEIDELBERG, GERMANY
ISSN: 1109-2858
29-Character Source Abbreviation: OPER RES-GER
ISO Source Abbreviation: Oper. Res.
Volume: 13
Version: 3
Start of File: 429
End of File: 446
DOI: 10.1007/s12351-013-0132-7
Number of Pages: 18
Web of Science Category: Operations Research & Management Science
Subject Category: Operations Research & Management Science
Document Delivery Number: AC3AB
Unique Article Identifier: WOS:000332386300007
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