Choice under Uncertainty with the Best and Worst in Mind: Neo-additive Capacities

Alain Chateauneuf, Jürgen Eichberger and Simon Grant

No 03-10, Sonderforschungsbereich 504 Publications from Sonderforschungsbereich 504, Universität Mannheim, Sonderforschungsbereich 504, University of Mannheim

Abstract: The concept of a non-extreme-outcome-additive capacity (neo-additive capacity ) is introduced. Neo-additive capacities model optimistic and pessimistic attitudes towards uncer-tainty as observed in many experimental studies. Moreover, neo-additive capacities can be applied easily in economic problems, as we demonstrate by examples. This paper provides an axiomatisation of Choquet expected utility with neo-capacities in a framework of purely subjective uncertainty.

Pages: 44 pages
Date: 2003-06-03
Note: We would like to thank Michele Cohen, Peter Hartley, Jean-Yves Jaffray, Mark Machina, Klaus Nehring, Matthew Ryan, Jean-Marc Tallon, and Jean-Christophe Vergnaud for extremely stimulating and helpful discussions. Financial support from the Deutsche Forschungsgemeinschaft, SFB 504, at the University of Mannheim, is gratefully acknowledged.
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Citations: View citations in EconPapers (28)

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Related works:
Journal Article: Choice under uncertainty with the best and worst in mind: Neo-additive capacities (2007)
Working Paper: Choice under uncertainty with the best and worst in mind: neo-additive capacities (2007)
Working Paper: Choice under uncertainty with the best and worst in mind: neo-additive capacities (2007)
Working Paper: Choice under uncertainty with the best and worst in mind: neo-additive capacities (2003)
Working Paper: Choice under Uncertainty with the Best and Worst in Mind: Neo-additive Capacities (2002)
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