Which decision theory?

Pavlo Blavatskyy

Economics Letters, 2013, vol. 120, issue 1, 40-44

Abstract: A new laboratory experiment is designed to identify the best theories for describing decisions under risk. The experimental design has two noteworthy features: a representative sample of binary choice problems (for fair comparison across theories) and a lottery set with a small number of outcomes and probabilities (for ease of non-parametric estimation). We find that a simple heuristic, rank-dependent utility and expected utility theory provide the best goodness of fit.

Keywords: Decision theory; Risk; Expected utility theory; Rank-dependent utility; Heuristic (search for similar items in EconPapers)
JEL-codes: D81 (search for similar items in EconPapers)
Date: 2013
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (7)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolet:v:120:y:2013:i:1:p:40-44

DOI: 10.1016/j.econlet.2013.03.039

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