One-reason decision-making: Modeling violations of expected utility theory

Journal of Risk and Uncertainty

Volumn 37, Issue 1, 2008, Pages 35-56

  Katsikopoulos, Konstantinos V ^a   Gigerenzer, Gerd ^a  

^a MAX PLANCK INSTITUTE FOR HUMAN DEVELOPMENT   (Germany)

Author keywords

Decision making; EUT; EVT; St. Petersburg Paradox

Indexed keywords

EID: 49649092139     PISSN: 08955646     EISSN: 15730476     Source Type: Journal    
DOI: 10.1007/s11166-008-9042-0     Document Type: Review

References (83)

1. Albers, W. (2001). Prominence theory as a tool to model boundedly rational decisions. In G. Gigerenzer, & R. Selten (Eds.), Bounded rationality: The adaptive toolbox. Cambridge, MA: MIT Press.
2. Allais, M. (1979). Foundations of a positive theory of choice involving risk, and a criticism of the postulates and axioms of the American School. In M. Allais, & O. Hagen (Eds.), Expected utility hypothesis and the Allais paradox. Dordrecht: D. Reidel Publishing Co. (original work published 1952).
3. J. M. Aizpurua T. Ichiishi J. Nieto J. R. Uriarte 1993 Similarity and preferences in the space of simple lotteries Journal of Risk and Uncertainty 6 3 289 297
4. Baucells, M., Carrasco, J. A., & Hogarth, R. M. (2008). Cumulative dominance and heuristic performance in binary multi-attribute choice. Operations Research (in press).
5. Bernoulli, D. (1738). Exposition of a new theory on the measurement of risk. Comentarii Academiae Scientiarum Imperialis Petropolitanae.
6. Translated and reprinted in Econometrica 22(1954), 23-36.
7. M. Birnbaum 2004 Causes of Allais common consequence paradoxes: An experimental dissection Journal of Mathematical Psychology 48 2 87 106
8. M. Birnbaum A. Chavez 1997 Tests of theories of decision making: Violations of branch independence and distribution independence Organizational Behavior and Human Decision Processes 71 2 161 194
9. P. R. Blavatskyy 2005 Back to the St. Petersburg paradox? Management Science 51 4 677 678
10. E. Brandstätter G. Gigerenzer R. Hertwig 2006 The priority heuristic: A process model of risky choice Psychological Review 113 2 409 432
11. Brighton, H. (2006). Robust inference with simple cognitive models. In C. Lebiere, & R. Wray (Eds.), Between a rock and a hard place: Cognitive science principles meet AI-hard problems. Papers from the AAAI spring symposium (AAAI Tech. Rep. No. SS-06-03). Menlo Park, CA: AAAI Press.
12. A. Bröder 2000 Assessing the empirical validity of the 'take-the-best' heuristic as a model of human probabilistic inference Journal of Experimental Psychology. Learning, Memory, and Cognition 26 5 1332 1346
13. A. Bröder 2003 Decision making with the 'adaptive toolbox': Influence of environmental structure, intelligence, and working memory load Journal of Experimental Psychology 29 4 611 625
14. A. Bröder S. Schiffer 2003 Take the best versus simultaneous feature matching: Probabilistic inferences from memory and effects of representation format Journal of Experimental Psychology. General 132 2 277 293
15. A. Bröder W. Gaissmaier 2007 Sequential processing of cues in memory-based multiattribute decisions Psychonomic Bulletin and Review 14 5 895 900
16. D. Buschena D. Zilberman 1995 Performance of the similarity hypothesis relative to existing models of risky choice Journal of Risk and Uncertainty 11 3 233 262
17. D. Buschena D. Zilberman 1999 Testing the effects of similarity on risky choice: Implications for violations of expected utility Theory and Decision 46 3 251 276
18. C. Camerer T.-H. Ho 1994 Violations of the betweenness axiom and nonlinearity in probability Journal of Risk and Uncertainty 8 2 167 196
19. J. Conlisk 1996 Why bounded rationality? Journal of Economic Literature 34 2 669 700
20. Daston, L. J. (1988). Classical probability in the enlightenment. Princeton, NJ: Princeton University Press.
21. Engel, C., & Daston, L. J. (Eds). (2006). Is there value in inconsistency? Baden-Baden: Nomos.
22. Erev, I., Roth, A. E., Slonim, R. L., & Barron, G. (2002). Combining a theoretical prediction with experimental evidence to yield a new prediction: an experimental design with a random sample of tasks. Unpublished manuscript, Columbia University and Faculty of Industrial Engineering and Management, Technion, Haifa, Israel.
23. I. Erev I. Glozman R. Hertwig 2008 What impacts the impact of rare events Journal of Risk and Uncertainty 36 2 153 177
24. P. C. Fishburn 1974 Lexicographic orders, utilities and decision rules: A survey Management Science 20 11 1442 1471
25. P. C. Fishburn 1991 Nontransitive preferences in decision theory Journal of Risk and Uncertainty 4 113 134
26. J. K. Ford N. Schmitt S. L. Schechtman B. H. Hults M. L. Doherty 1989 Process tracing methods: Contributions, problems, and neglected research questions Organizational Behavior and Human Decision Processes 43 1 75 117
27. Gigerenzer, G. (2004). Fast and frugal heuristics: The tools of bounded rationality. In D. Koehler, & N. Harvey (Eds), Blackwell handbook of judgment and decision making (pp. 62-88). Malden: Blackwell.
28. G. Gigerenzer 2005 I think, therefore I err Social Research 72 1 195 218
29. G. Gigerenzer D. G. Goldstein 1996 Reasoning the fast and frugal way: Models of bounded rationality Psychological Review 103 4 650 669
30. G. Gigerenzer H. R. Richter 1990 Context effects and their interaction with development: area judgments Cognitive Development 5 3 235 264
31. Gigerenzer, G., & Selten, R. (Eds). (2001). Bounded rationality: The adaptive toolbox. Cambridge, MA: MIT Press.
32. Gigerenzer, G., & Todd, P. M. (1999). Simple heuristics that make us smart. New York: Oxford University Press.
33. T. J. Gilbride G. M. Allenby 2004 A choice model with conjunctive, disjunctive, and compensatory screening rules Marketing Science 23 3 391 406
34. Heckhausen, H. (1991). Motivation and action (Peter K. Leppmann, trans.). Berlin: Springer.
35. R. M. Hogarth N. Karelaia 2005 Simple models for multi-attribute choice with many alternatives: When it does and does not pay to face trade-offs with binary attributes Management Science 51 12 1860 1872
36. R. M. Hogarth N. Karelaia 2006 'Take-the-best' and other simple strategies: Why and when they work 'well' with binary cues Theory and Decision 61 3 205 249
37. J. Jedetski L. Adelman C. Yeo 2002 How web site decision technology affects consumers IEEE Internet Computing 6 2 72 79
38. Jorland, G. (1987). The Saint Petersburg paradox 1713-1937. In L. Krüger, G. Gigerenzer, & M. S. Morgan (Eds.), The Probabilistic revolution, vol. 1. Ideas in the sciences. Cambridge, MA: MIT Press.
39. D. Kahneman 2003 A perspective on judgment and choice: Mapping bounded rationality American Psychologist 58 9 697 720
40. D. Kahneman A. Tversky 1979 Prospect theory: An analysis of decision under risk Econometrica 47 2 263 291
41. K. V. Katsikopoulos B. Fasolo 2006 New tools for decision analysts IEEE Transactions on Systems, Man, and Cybernetics: Systems and Humans 36 5 960 967
42. K. V. Katsikopoulos L. Martignon 2006 Naive heuristics for paired comparisons: Some results on their relative accuracy Journal of Mathematical Psychology 50 5 488 494
43. J. W. Leland 1994 Generalized similarity judgments: An alternative explanation for choice anomalies Journal of Risk and Uncertainty 9 2 151 172
44. J. W. Leland 2002 Similarity judgments and anomalies in intertemporal choice Economic Inquiry 40 4 574 581
45. G. Lilly 1994 Bounded rationality: A Simon-like explication Journal of Economic Dynamics and Control 18 1 105 230
46. G. F. Loewenstein E. U. Weber C. K. Hsee N. Welch 2001 Risk as a feeling Psychological Bulletin 127 2 267 286
47. G. Loomes R. Sugden 1987 Testing for regret and disappointment in choice under uncertainty The Economic Journal 97 118 129
48. Lopes, L. L. (1995). Algebra and process in the modeling of risky choice. In J. R. Busemeyer, R. Hastie, & D. Medin (Eds.), Decision making from the perspective of cognitive psychology. New York: Academic Press.
49. L. L. Lopes G. C. Oden 1999 The role of aspiration level in risky choice: A comparison of cumulative prospect theory and SP/A theory Journal of Mathematical Psychology 43 2 286 313
50. R. D. Luce 1956 Semiorders and a theory of utility discrimination Econometrica 24 2 178 191
51. R. D. Luce 1990 Rational versus plausible accounting equivalences in preference judgments Psychological Science 1 4 225 234
52. R. D. Luce D. von Winterfeldt 1994 What common ground exists for descriptive, prescriptive, and normative utility theories? Management Science 40 2 263 279
53. MacCrimmon, K. R. (1968). Descriptive and normative implications of the decision-theory postulate. In K. H. Borch, & J. Mossin (Eds.), Risk and uncertainty. New York: St. Martin's Press.
54. A. A. J. Marley R. D. Luce 2005 Independence properties vis-à-vis several utility representations Theory and Decision 58 1 77 143
55. L. Martignon U. Hoffrage 2002 Fast, frugal and fit: Lexicographic heuristics for paired comparison Theory and Decision 52 1 29 71
56. Martignon, L., Vitouch, O., Takezawa, M., & Forster, M. R. (2003). Naive and yet enlightened: from natural frequencies to fast and frugal decision trees. In D. Hardman, & L. Macchi (Eds.), Thinking: Psychological perspectives on reasoning, judgment and decision making. Chichester, UK: Wiley.
57. W. Neilson J. Stowe 2002 A further examination of cumulative prospect theory parameterizations The Journal of Risk and Uncertainty 24 1 31 46
58. R. M. Nosofsky B. F. Bergert 2007 Limitations of exemplar models for multi-attribute probabilistic inference Journal of Experimental Psychology. Learning, Memory, and Cognition 33 6 999 1119
59. A. Parducci 1965 Category judgment: A range-frequency model Psychological Review 72 6 407 418
60. Payne, J. W., Bettman, J. R., & Johnson, E. J. (1993). The adaptive decision maker. Cambridge, UK: Cambridge University Press.
61. D. Prelec 1998 The probability weighting function Econometrica 66 3 497 527
62. Rieskamp, J., & Hoffrage, U. (1999). When do people use simple heuristics and how can we tell? In G. Gigerenzer, & P. M. Todd (Eds.), the ABC Research Group. Simple heuristics that make us smart. New York: Oxford University Press.
63. J. Rieskamp P. E. Otto 2006 SSL: A theory of how people learn to select strategies Journal of Experimental Psychology. General 135 2 207 236
64. S. Roberts H. Pashler 2000 How persuasive is a good fit? A comment on theory testing Psychological Review 107 2 358 367
65. A. Rubinstein 1988 Similarity and decision-making under risk (is there a utility theory resolution to the Allais-paradox?) Journal of Economic Theory 46 1 145 153
66. Sargent, T. J. (1993). Bounded rationality in macroeconomics. New York: Oxford University Press.
67. N. Schwarz 1999 Self-reports: How the questions shape the answers American Psychologist 54 2 93 105
68. Savage, L. J. (1954). The foundations of statistics. New York: Wiley.
69. N. Schwarz H.-J. Hippler B. Deutsch F. Strack 1985 Response categories: Effects on behavioral reports and comparative judgments Public Opinion Quarterly 49 3 388 395
70. Selten, R. (2001). What is bounded rationality? In G. Gigerenzer, & R. Selten (Eds.), Bounded rationality: The adaptive toolbox. Cambridge, MA: MIT Press.
71. E. Shafir I. Simonson A. Tversky 1993 Reason-based choice Cognition 49 1/2 11 36
72. H. A. Simon 1955 A behavioral model of rational choice Quarterly Journal of Economics 69 1 99 118
73. H. A. Simon 1956 Rational choice and the structure of the environment Psychological Review 63 2 129 138
74. Slovic, P., Griffin, D., & Tversky, A. (1990). Compatibility effects in judgment and choice. In R. M. Hogarth (Ed.), Insights in decision making: A tribute to Hillel J. Einhorn. Chicago: The University of Chicago Press.
75. C. Starmer 2000 Developments in non-expected utility theory: The hunt for a descriptive theory of choice under risk Journal of Economic Literature 38 2 332 382
76. C. R. Sunstein 2003 Terrorism and probability neglect Journal of Risk and Uncertainty 26 2/3 121 136
77. G. J. Stigler 1961 The economics of information Journal of Political Economy 69 3 213 225
78. A. Tversky 1969 Intransitivity of preferences Psychological Review 76 1 31 48
79. A. Tversky C. R. Fox 1995 Weighing risk and uncertainty Psychological Review 102 2 269 283
80. A. Tversky D. Kahneman 1992 Advances in prospect theory: Cumulative representation of uncertainty Journal of Risk and Uncertainty 5 4 297 323
81. W. K. Viscusi 1989 Prospective reference theory: Toward an explanation of the paradoxes Journal of Risk and Uncertainty 2 235 264
82. G. Wu R. Gonzalez 1996 Curvature of the probability weighting function Management Science 42 12 1676 1690
83. M. Yee J. R. Hauser J. B. Orlin E. Dahan 2007 Greedoid-based non-compensatory two-stage consideration-then-choice inference Marketing Science 26 4 532 549