Choice under uncertainty and bounded rationality

dc.contributor.author	Dagsvik, John K.
dc.date.accessioned	2011-10-08T16:43:19Z
dc.date.available	2011-10-08T16:43:19Z
dc.date.issued	2005
dc.identifier.issn	1892-753x
dc.identifier.uri	http://hdl.handle.net/11250/180341
dc.description.abstract	Abstract: This paper develops a theory for probabilistic models for risky choices that can be viewed as an extension of the expected utility theory to account for bounded rationality. One probabilistic version of the Archimedean Axiom and two versions of the Independence Axiom are proposed. In addition, additional axioms are proposed of which one is Luce’s Independence from Irrelevant Alternatives. It is demonstrated that different combinations of the axioms yield different characterizations of the probabilities for choosing the respective risky prospects. Keywords: Random tastes, bounded rationality, independence from irrelevant alternatives, choice among lotteries, probabilistic choice for uncertain outcomes.	en_US
dc.language.iso	eng	en_US
dc.publisher	Statistics Norway	en_US
dc.relation.ispartofseries	Discussion Papers;No. 409
dc.subject	Random tastes	en_US
dc.subject	Bounded rationality	en_US
dc.subject	Probabilistic choice	en_US
dc.subject	Choice among lotteries	en_US
dc.subject	JEL classification: C25	en_US
dc.subject	JEL classification: D11	en_US
dc.subject	JEL classification: D81	en_US
dc.title	Choice under uncertainty and bounded rationality	en_US
dc.type	Working paper	en_US
dc.source.pagenumber	41 s.	en_US