Risk, Uncertainty and Discrete Choice Models
André de Palma (),
David Brownstone (),
Charles Holt (),
Thierry Magnac (),
Peter Moffatt (),
Nathalie Picard (),
Kenneth Train (),
Peter Wakker and
Additional contact information
Moshe Ben-Akiva: Massachusetts Institute of Technology
Joan Walker: Boston University
No 2008-02, THEMA Working Papers from THEMA (THéorie Economique, Modélisation et Applications), Université de Cergy-Pontoise
This paper examines the cross-fertilizations of random utility models with the study of decision making under risk and uncertainty. We start with a description of the Expected Utility (EU) theory and then consider deviations from the standard EU frameworks, involving the Allais paradox and the Ellsberg paradox, inter alia. We then discuss how the resulting Non-EU framework can be modeled and estimated within the framework of discrete choices in static and dynamic contexts. Our objectives in addressing risk and ambiguity in individual choice contexts are to understand the decision choice process, and to use behavioral information for prediction, prescription and policy analysis.
Keywords: discrete choice; decision making; risk; uncertainty; (cumulative) prospect theory; ambiguity (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-cba, nep-cbe, nep-dcm and nep-upt
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Journal Article: Risk, uncertainty and discrete choice models (2008)
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Persistent link: https://EconPapers.repec.org/RePEc:ema:worpap:2008-02
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