Economics at your fingertips  

Boundedly rational expected utility theory

Daniel Navarro-Martinez (), Graham Loomes (), Andrea Isoni (), David Butler and Larbi Alaoui
Additional contact information
Daniel Navarro-Martinez: Pompeu Fabra University
Graham Loomes: University of Warwick
Larbi Alaoui: Pompeu Fabra University

Journal of Risk and Uncertainty, 2018, vol. 57, issue 3, 199-223

Abstract: Abstract We build a satisficing model of choice under risk which embeds Expected Utility Theory (EUT) into a boundedly rational deliberation process. The decision maker accumulates evidence for and against alternative options by repeatedly sampling from her underlying set of EU preferences until the evidence favouring one option satisfies her desired level of confidence. Despite its EUT core, the model produces patterns of behaviour that violate standard EUT axioms, while at the same time capturing systematic relationships between choice probabilities, response times and confidence judgments, which are beyond the scope of theories that do not take deliberation into account.

Keywords: Expected utility; Bounded rationality; Deliberation; Probabilistic choice; Confidence; Response times; D03; D81 (search for similar items in EconPapers)
Date: 2018
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1) Track citations by RSS feed

Downloads: (external link) Abstract (text/html)
Access to full text is restricted to subscribers.

Related works:
Working Paper: Boundedly Rational Expected Utility Theory (2017) Downloads
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link:

Ordering information: This journal article can be ordered from
http://www.springer. ... ry/journal/11166/PS2

Access Statistics for this article

Journal of Risk and Uncertainty is currently edited by W. Kip Viscusi

More articles in Journal of Risk and Uncertainty from Springer
Bibliographic data for series maintained by Sonal Shukla ().

Page updated 2020-01-11
Handle: RePEc:kap:jrisku:v:57:y:2018:i:3:d:10.1007_s11166-018-9293-3