Sugden, Robert
Published in
Theory and Decision
I reconsider Bleichrodt, Pinto Prades and Wakker’s (BPW) 2001 paper about eliciting utility measures from stated preference surveys. That paper pioneers a method that is now widely used in behavioural economics to correct individuals’ ‘biases’ and to recover their ‘true preferences’. However, BPW propose this method as way of dealing with inconsist...
Battigalli, P. Cerreia-Vioglio, S. Maccheroni, F. Marinacci, M. Sargent, T.
Published in
Theory and Decision
This paper provides a general framework for analyzing self-confirming policies. We study self-confirming equilibria in recurrent decision problems with incomplete information about the true stochastic model. We characterize stationary monetary policies in a linear-quadratic setting.
Barokas, Guy
Published in
Theory and Decision
The note puts forward the idea of revealed desirability , a novel instrument, which like revealed preference is observable from choice and important for individual and social welfare. We provide the axiomatic underlying individual’s choice model, preliminary experimental results that support the idea, and an appealing allocation rule that uses the ...
Ghidoni, Riccardo Ploner, Matteo
Published in
Theory and decision
Distributional justice-measured by the proportionality between effort exerted and rewards obtained-and guilt aversion-triggered by not fulfilling others' expectations-are widely acknowledged fundamental sources of pro-social behavior. We design three experiments to study the relevance of these sources of behavior when considered in interaction. In ...
Chierchia, Gabriele Tufano, Fabio Coricelli, Giorgio
Published in
Theory and Decision
Friendship is commonly assumed to reduce strategic uncertainty and enhance tacit coordination. However, this assumption has never been tested across two opposite poles of coordination involving either strategic complementarity or substitutability. We had participants interact with friends or strangers in two classic coordination games: the stag-hun...
Banerjee, Subrato
Published in
Theory and Decision
Several allocation rules (such as the Kalai–Smorodinsky solution) allow for possible violations of the ‘independence of irrelevant alternatives’ (IIA) axiom in cooperative bargaining game theory. Nonetheless, there is no conclusive evidence on how contractions of feasible sets exactly affect bargaining outcomes. We have been able to identify a defi...
Pawitan, Yudi Isheden, Gabriel
Published in
Theory and Decision
Zeckhauser’s paradox has puzzled and entertained many rationality enthusiasts for almost half a century. You are forced to play a Russian Roulette with a 6-chamber revolver containing either (A) two bullets, or (B) four bullets. Would you pay more to remove the two bullets in (A) than you would to remove one in (B)? Most would say yes, but rational...
De Jaegher, Kris
Published in
Theory and Decision
This paper develops a model of persuasive demand inducement in the expert–client relationship. The expert frames the decision on whether or not to buy expert services faced by a client with prospect-theoretic preferences, by making the client see this decision from the perspective of a particular reference point. When inducing a client to buy risky...
Borah, Abhinash Kops, Christopher
Published in
Theory and Decision
We address the oft-repeated criticism that the demands which the rational choice approach makes on the knowledge and cognition of a decision-maker (DM) are way beyond the capabilities of typical human intelligence. Our key finding is that it may be possible to arrive at this ideal of rationality by means of cognitively less demanding, heuristic-bas...
Nielsen, Michael
Published in
Theory and Decision
We discuss Herzberg’s (Theory Decis 78(2):319–337, 2015) treatment of linear aggregation for profiles of infinitely many finitely additive probabilities and suggest a natural alternative to his definition of linear continuous aggregation functions. We then prove generalizations of well-known characterization results due to (J Am Stat Assoc 76(374):...
