A Theory of Vague Expected Utility

Paola Manzini () and Marco Mariotti

The B.E. Journal of Theoretical Economics, 2004, vol. topics.4, issue 1, pages 10

Abstract:

We propose a new theory of choice between lotteries, which combines an 'economic' view of decision making - based on a rational, though incomplete, ordering - with a 'psychological' view - based on heuristics. This theory can explain observed violations of EU theory, namely all cyclical patterns of choice as well as violations of independence.

Keywords: incomplete preference relation; cyclical preferences; expected utility (search for similar items in EconPapers)
JEL-codes: D81 (search for similar items in EconPapers)
Date: 2004
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