Multiattribute regret: theory and experimental study

Yoichiro Fujii (), Hajime Murakami (), Yutaka Nakamura and Kazuhisa Takemura ()
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Yoichiro Fujii: Meiji University
Hajime Murakami: Hokkai-Gakuen University
Kazuhisa Takemura: Waseda University

Theory and Decision, 2023, vol. 95, issue 4, No 4, 623-662

Abstract: Abstract This paper generalizes the simple regret model by Bell in Operations Research 30(5), 961-981 and Loomes and Sugden in The Economic Journal 92(368), 805-824 to cope with the situation in which decision outcomes are multi-attributed. We propose a model that combines the simple regret model for ex ante preferences and the additive difference representation for ex post preferences. We first present a necessary and sufficient axiomatization of our model in Savage’s framework. The proposed model is composed of three types of functions. One is a value function for each attribute. The others are attribute-dependent and holistic regret-rejoicing functions that capture trade-offs among value-differences of chosen and forgone outcomes for each attribute and among all attributes, respectively. We then provide constructive procedures for those functions and methods for consistency checks of the procedures. We, finally, conduct an experiment to estimate those functions in the two attributes case by means of the constructive procedure and give an application of the model and our findings.

Keywords: Multiattribute regret theory; Decision making under uncertainty; Utility measurement; Holistic regret aversion; Attribute-dependent regret aversion (search for similar items in EconPapers)
Date: 2023
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DOI: 10.1007/s11238-023-09936-w

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