Decision making in phantom spaces
Yehuda Izhakian () and
Zur Izhakian ()
Economic Theory, 2015, vol. 58, issue 1, 59-98
This paper introduces a new model of decision making under uncertainty. Aiming to provide a more realistic depiction of decision making, it generalizes the von Neumann–Morgenstern theory by including additional tiers of uncertainty. In this model, beliefs about the probabilities of events are ambiguous and their consequential utilities are vague; both are naturally formulated in the phantom space using phantom numbers. The degree of uncertainty, determined by the decision maker’s beliefs, is distinguished from the attitude toward uncertainty, which is drawn from her preferences. Decision making under ambiguity is a particular case of our model in which probabilities are ambiguous, but resulting utilities of events are knowable. Copyright Springer-Verlag Berlin Heidelberg 2015
Keywords: Phantom probability; Decision making under uncertainty; Expected utility; Imprecise risk; Ambiguity; Uncertainty; Ellsberg paradox; C65; D81; D83 (search for similar items in EconPapers)
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3) Track citations by RSS feed
Downloads: (external link)
Access to full text is restricted to subscribers.
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:spr:joecth:v:58:y:2015:i:1:p:59-98
Ordering information: This journal article can be ordered from
http://www.springer. ... eory/journal/199/PS2
Access Statistics for this article
Economic Theory is currently edited by Nichoals Yanneils
More articles in Economic Theory from Springer, Society for the Advancement of Economic Theory (SAET) Contact information at EDIRC.
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().