Framing-based Choice: A Model of Decision-making Under Risk

Kobi Kriesler and Shmuel Nitzan
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Kobi Kriesler: Bar-Ilan University

Korean Economic Review, 2009, vol. 25, 65-89

Abstract: In this study we propose an axiomatic theory of decision-making under risk that is based on a new approach to the modeling of framing that focuses on the subjective statistical dependence between prizes of compared lotteries. Unlike existing models that allow objective statistical dependence, as in Regret Theory, in our model the emphasis is on alternative subjective statistical dependence patterns that are induced by alternative descriptions of the lotteries, i.e., by alternative framing. A distinct advantage of the proposed general descriptive model of choice is its ability to adequately explain a wide variety of behaviors and, in particular, several well-known paradoxes of different types.

Keywords: Framing; Statistical Dependence; Non-expected Utility; Expected Value of Lottery Interchange (search for similar items in EconPapers)
JEL-codes: D81 (search for similar items in EconPapers)
Date: 2009
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Working Paper: Framing-Based Choice: A Model of Decision-Making Under Risk (2009)
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Persistent link: https://EconPapers.repec.org/RePEc:kea:keappr:ker-20090630-25-1-03

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