Regret theory and risk attitudes

We examine risk attitudes under regret theory and derive analytical expressions for two components—the resolution and regret premiums—of the risk premium under regret theory. We posit that regret-averse decision makers are risk seeking (resp., risk averse) for low (resp., high) probabilities of gains and that feedback concerning the foregone option reinforces risk attitudes. We test these hypotheses experimentally and estimate empirically both the resolution premium and the regret premium. Our results confirm the predominance of regret aversion but not the risk attitudes predicted by regret theory; they also clarify how feedback affects attitudes toward both risk and regret.     

Regret aversion in reason-based choice

This research examines the moderating role of regret aversion in reason-based choice. Earlier research has shown that regret aversion and reason-based choice effects are linked through a common emphasis on decision justification, and that a simple manipulation of regret salience can eliminate the decoy effect, a well-known reason-based choice effect. We show here that the effect of regret salience varies in theory-relevant ways from one reason-based choice effect to another. For effects such as the select/reject and decoy effect, both of which were independently judged to be unreasonable bases for deciding, regret salience eliminated the effect. For the most-important attribute effect that is judged to be normatively acceptable, however, regret salience amplified the effect. Anticipated self-blame regret and perceived decision justifiability consistently predicted preferences and thus offer a parsimonious account of both attenuation and amplification of these reason-based choice effects.     

Statistical decisions under ambiguity

This article provides unified axiomatic foundations for the most common optimality criteria in statistical decision theory. It considers a decision maker who faces a number of possible models of the world (possibly corresponding to true parameter values). Every model generates objective probabilities, and von Neumann–Morgenstern expected utility applies where these obtain, but no probabilities of models are given. This is the classic problem captured by Wald’s (Statistical decision functions, 1950) device of risk functions. In an Anscombe–Aumann environment, I characterize Bayesianism (as a backdrop), the statistical minimax principle, the Hurwicz criterion, minimax regret, and the “Pareto” preference ordering that rationalizes admissibility. Two interesting findings are that c-independence is not crucial in characterizing the minimax principle and that the axiom which picks minimax regret over maximin utility is von Neumann–Morgenstern independence.     

Dynamic awareness and zero probability beliefs

We study behavioral patterns of insurance demand for low-probability large-loss events (catastrophic losses). Individual patterns of belief formation and risk attitude that were suggested in the behavioral decisions literature emerge robustly in the current set of insurance choices. However, social comparison effects are less robust. We do not find any evidence for peer effects (through social-loss aversion or imitation) on insurance take-up. In contrast, we find support for the prediction that people underweight others’ relevant information in their own decision making.     

Prosocial risk taking and interpersonal regret in children: An individual differences study

The relations between prosocial risk taking (taking a risk to benefit another person; PSRT) and interpersonal regret (regret that one's choices have caused a poor outcome for another person) were examined in 192 children aged 7–9. PSRT was measured by children's choices within a gambling task in which one choice guaranteed participants a good prize whereas the other involved risking this prize to help a peer also win a good prize. Interpersonal regret was assessed within the same task by examining children's change in emotion when they learned they would have won a better prize for a peer had they chosen differently. Performance on this task was also examined in relation to sympathy and resource sharing. Findings indicated that the operationalizations of PSRT and interpersonal regret were meaningful. Children who took a prosocial risk were more generous in a resource sharing task. In some circumstances, children who took a prosocial risk were also more likely to experience interpersonal regret than those who did not take a prosocial risk, indicating that experiencing interpersonal regret may be related to individual differences in prosociality. However, experiencing interpersonal regret did not have a direct effect on subsequent prosocial behavior, when measured by resource sharing. We consider findings in relation to a possible distinction between outcome and process regret and the generalizability of the behavioral consequences of regret.     

Nontransitive preferences in decision theory

Intransitive preferences have been a topic of curiosity, study, and debate over the past 40 years. Many economists and decision theorists insist on transitivity as the cornerstone of rational choice, and even in behavioral decision theory intransitivities are often attributed to faulty experiments, random or sloppy choices, poor judgment, or unexamined biases. But others see intransitive preferences as potential truths of reasoned comparisons and propose representations of preferences that accommodate intransitivities. This article offers a partial survey of models for intransitive preferences in a variety of decisional contexts. These include economic consumer theory, multiattribute utility theory, game theory, preference between time streams, and decision making under risk and uncertainty. The survey is preceded by a discussion of issues that bear on the relevance and reasonableness of intransitivity.     

Risk aversion elicitation: reconciling tractability and bias minimization

Risk attitude is known to be a key determinant of various economic and financial choices. Behavioral studies that aim to evaluate the role of risk attitudes in contexts of this type, therefore, require tools for measuring individual risk tolerance. Recent developments in decision theory provide such tools. However, the methods available can be time consuming. As a result, some practitioners might have an incentive to prefer “fast and frugal” methods to clean but more costly methods. In this article, we focus on a tractable procedure initially proposed by Holt and Laury (2002) to elicit risk attitude. We generalize this method to measure utility and risk aversion as follows. First, we allow measurement of probabilistic risk attitude through violations of expected utility due to probability weighting. Second, we use the outcome scale rather than the probability scale in the menu of choices. Third, we compare sure payoffs with lotteries instead of comparing non-degenerate lotteries. A within-subject experimental study illustrates the gains in tractability and bias minimization that can result from such an extension.     

Individual vs. couple behavior: an experimental investigation of risk preferences

In this article, we elicit both individuals’ and couples’ preferences assuming prospect theory (PT) as a general theoretical framework for decision under risk. Our experimental method, based on certainty equivalents, allows to infer measurements of utility and probability weighting at the individual level and at the couple level. Our main results are twofold. First, risk attitude for couples is compatible with PT and incorporates deviations from expected utility similar to those found in individual decision making. Second, couples’ attitudes towards risk are found to be consistent with a mix of individual attitudes, women being more influent on couples’ preferences at low probability levels.     

Regret theory with general choice sets

The regret theory of choice under uncertainty proposed by Loomes and Sugden has performed well in explaining and predicting violations of Expected Utility theory. The original version of the model was confined to pairwise choices, which limited its usefulness as an economic theory of choice. Axioms for a more general form of regret theory have been proposed by Loomes and Sugden. In this article, it is shown that a simple nonmanipulability requirement is sufficient to characterize the functional form for regret theory with general choice sets. The stochastic dominance and comparative static properties of the model are outlined. A number of special cases are derived in which regret theory is equivalent to other well-known theories of choice under uncertainty.I would like to thank Graham Loomes, Robert Sugden, Peter Wakker, and Nancy Wallace for helpful comments and criticism.     

Estimating Risk Attitudes using Lotteries: A Large Sample Approach

Attitudes towards risk play a major role in many economic decisions. In empirical studies it is quite often assumed that attitudes towards risk do not vary across individuals. This paper questions this assumption and analyses which factors influence an individual's risk attitude. Based on questions on lotteries in a large household survey we first semiparametrically estimate an index for risk aversion. We only make weak assumptions about the underlying decision process and our estimation method allows for generalisations of expected utility. We then estimate a structural model based on Cumulative Prospect Theory. Expected utility is strongly rejected and both the value function and the probability weighting function vary significantly with (among other things) age, income, and wealth of the individual.     

马克思主义公正观的基本向度及方法论原则(英文)

在社会公正问题的大讨论中,罗尔斯、诺齐克、哈耶克、麦金泰尔等当代西方思想家的论述被反复引用和申说,而将马克思恩格斯等经典作家的观点置于一种被忽视甚至被忘却的状态。形成这种状态的原因是多方面的。对历史背景和语境不作具体的分析,就难以把握马克思恩格斯对于社会公正问题的真实态度和精神实质,甚至会得出他们不仅没有关于社会公正的理论,而且反对和拒斥从社会公正角度讨论问题的结论。马克思主义作为无产阶级认识和改造世界、求得自身解放和人类解放的世界观和方法论,是真理与价值相统一的理论,也只有从科学向度与价值向度辩证统一的角度,才可能对作为价值之一种表现的公正问题作出合理的理解。公正既是一种价值观念,具有评价标准的功能,也是实际的价值（包括利益、机会、权利等）分配的一种状态,其中会涉及自由与平等的矛盾、形式公正与实质公正的矛盾、一般与特殊的差别、平等与效率的抵牾、公正与不公正的对立,等等,只有运用辩证思维的方法,才能对其复杂性获得正确的认识。     

Context dependence and consistency in dynamic choice under uncertainty: the case of anticipated regret

We examine if and to what extent choice dispositions can allow dependence on contexts and maintain consistency over time, in a dynamic environment under uncertainty. We focus on one of the context dependence properties, opportunity dependence because of being affected by anticipated regret, where the consequentialist choice framework is maintained. There are two sources of potential inconsistency: one is arrival of information, and the other is changing opportunities. First, we go over the general method of resolution of potential inconsistency, by taking any kinds of inconsistency as given constraints. Second, we characterize a class of choice dispositions that are consistent to information arrival, but may be inconsistent to changing opportunities. Finally, we consider the overall requirement of dynamic consistency and show that it necessarily implies each of consistency to information arrival and independence of choice opportunities. The last result states that the two kinds of potential inconsistency cannot “compensate” each other to recover dynamic consistency overall.     

Current practices in intake and service in family welfare organizations 1 : A study of the experience of eight agencies in 1934–35

Autism spectrum disorders include difficulties with social interaction, repetitive behavior, sensory sensitivity, and, often, concomitant language deficits. Psychodynamic theory is a powerful tool in explaining and treating the behavioral symptoms of autism. Specifically, the object relations theories of Melanie Klein and Wilfred Bion explicate the meanings and developmental challenges associated with autism. The epistemology of heuristics, with the use of triangulation, supports psychodynamic theory as one of multiple ways of interpreting phenomena. In this particular situation, the symptoms and presenting issues associated with autism evident in this composite clinical case are drawn from one of the author’s practice. This report illustrates the use of psychodynamic formulations and treatment in the psychotherapeutic work with a 12-year-old boy diagnosed with autism whom we call Austin.     

Perception and organizational crisis management

The crisis management literature suggests that under crisis pressures decision makers (1) develop a highly negative attitude, and (2) move toward centralizing the decision process in policy areas. It is hypothesized here that these behavioral consequences do not accompany all cases of crisis confrontation but occur when the decision maker perceives a significant discrepancy between one's coping abilities and what is viewed to be necessary to abate the crisis. This hypothesis has been empirically tested. The evidence supports this perceptual nature of organizational crisis management.The survey for this study was sponsored by School of Business, North Carolina Central University and was conducted by the author and Terry Hogan. The author is grateful to Terry Hogan, Dean Tjosvold, William Savage, and Marian Thorne for their valuable comments on earlier drafts of this paper.     

Behavioral patterns and reduction of sub-optimality: an experimental choice analysis

This paper attempts to identify behavioral patterns and compare their average success considering several criteria of bounded rationality. Experimentally observed choice behavior in various decision tasks is used to assess heterogeneity in how individual participants respond to 15 randomly ordered portfolio choices, each of which is experienced twice. Treatments differ in (not) granting probability information and in (not) eliciting aspirations. Since in our setting neither other regarding concerns nor risk attitude matter and probability of the binary chance move is (optimal) choice irrelevant, categorizing decision types relies on parameter dependence and choice adaptations. We find that most participants reduce systematically sub-optimality when following the identified criteria.     

Improving decision‐making in care order proceedings: A multijurisdictional study of court decision‐makers' viewpoints

Child welfare removals of children are among the most invasive decisions a state can make toward its citizens, and typically it is the courts that make these decisions. These interventions are regularly exposed to criticism. In this paper, we examine if and how care order proceedings could be improved in England, Finland, Norway, and California, USA. We have asked the judiciary decision‐makers about their view on what should be improved. Our findings show that the organization of the proceedings, including time and staff, are identified as issues in all four systems. Furthermore, the preparations by the child welfare agency are also mentioned as an issue, for English, Finnish, and Californian decision‐makers. Very few decision‐makers indicate features related to the individual, situational, and contextual dimensions, which is interesting since this would be expected from organization theory. The strong call for change in the way proceedings are organized indicates a need for modernization as well as better use of available competency from child development experts. The respondents focus on the elements that a decision‐maker has direct experience with and knowledge about, and this is indeed worth noting for policymakers in the four systems.     

适度普惠视阈下我国儿童社会福利体系构建及其实施路径

民政部提出社会福利由"补缺型"向"适度普惠型"转变的战略决策,为我国社会福利发展趋向奠定了政治基础。此后,适度普惠社会福利成为国家和学界共同关心和关注的重要议题,也逐渐成为我国当前和接下来一段时期内的主导社会福利模式。在这种背景下,回顾和评价我国儿童社会福利发展取得的成效和存在的不足,从福利对象、原则、理念、内容、政策体系、以及责任主体等六个方面建构我国适度普惠儿童社会福利体系,并进一步提出其实施路径,具有重要的战略意义和现实意义。     

On a concept of representative democracy

Political theory distinguishes between two concepts of representative democratic decisions. Under the first concept, representatives do not decide issues as independent individuals but merely reflect the will of their constituencies; under the second, the decisions are made by the elected representatives themselves on the basis of their independent judgments on political issues. In the literature of democratic choice, the first concept has been formalized by Murakami, Fishburn, Pattanaik among others, in terms of decision procedures where the representative is identified with the preference-pattern emerging from the aggregation of the preferences of individual voters in a given constituency. Here we formalize the second type of representative democracy and show that it comes into conflict with certain essential features of a democratic group decision rule. In particular decisiveness and monotonicity are violated. The violation of monotonicity is of particular significance because it has come to be regarded as one of the fundamental principles for the ethical acceptability of democratic decision procedures.I am also grateful to the University Grants Commission of India for the financial assistance in carrying out this study.I wish to acknowledge my great debt to Professor Prasanta K. Pattanaik, my supervisor, both for initiating me to this problem and for his invaluable comments, criticisms and guidance. The paper acquired much of its present status through the discussions I had with him. Responsibility for any error, of course, rests with me.